Kaushik Mitra and Seppo Honkapohja (2004) Are Non-Fundamental Equilibria Learnable in Models of Monetary Policy?.
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Recent models of monetary policy can have indeterminacy of equilibria, which is often viewed as a difficulty of these models. We consider the significance of indeterminacy using the learning approach to expectations formation. We employ expectational stability as a selection criterion for different equilibria and derive the expectational stability and instability conditions for forward-looking multivariate models, both without and with lags. The results are applied to several monetary policies.
This is a Accepted version This version's date is: 2004 This item is not peer reviewed
https://repository.royalholloway.ac.uk/items/1e9aa0d5-56b2-0373-db5f-f7bdac3112fe/1/
Deposited by Leanne Workman (UXYL007) on 12-Oct-2012 in Royal Holloway Research Online.Last modified on 12-Oct-2012
©2004 Seppo Honkapohja and Kaushik Mitra. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit including © notice, is given to the source.