Download or read book Adaptive Learning and Monetary Policy Design written by George W. Evans and published by . This book was released on 2003 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tiivistelmä: Adaptiivinen oppiminen ja rahapolitiikan muotoilu.

Download or read book Adaptive Learning Endogenous Inattention and Changes in Monetary Policy written by William A. Branch and published by . This book was released on 2006 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book How Do Adaptive Learning Expectations Rationalize Stronger Monetary Policy Response in Brazil written by Allan Dizioli and published by International Monetary Fund. This book was released on 2023-01-27 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates a standard Dynamic Stochastic General Equilibrium (DSGE) model that includes a wage and price Phillip's curves with different expectation formation processes for Brazil and the USA. Other than the standard rational expectation process, we also use a limited rationality process, the adaptive learning model. In this context, we show that the separate inclusion of a labor market in the model helps to anchor inflation even in a situation of adaptive expectations, a positive output gap and inflation above target. The estimation results show that the adaptive learning model does a better job in fitting the data in both Brazil and the USA. In addition, the estimation shows that expectations are more backward-looking and started to drift away sooner in 2021 in Brazil than in the USA. We then conduct optimal policy exercises that prescribe early monetary policy tightening in the context of positive output gaps and inflation far above the central bank target.

Download or read book Essays on Adaptive Learning and Monetary Policy in an Open Economy written by Pisut Kulthanavit and published by . This book was released on 2008 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Monetary Policy Design Under Imperfect Knowledge written by Yu-Chin Chen and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Incorporating adaptive learning into an open-economy DSGE model, we examine how monetary policy rules should adjust when agents' information set deviates from that assumed under the rational expectations paradigm. We find that when agents observe current shocks but don't know the parameters governing key macroeconomic dynamics, the resulting distortion is small and the preferred policy under rational expectations works well. However, the welfare cost of imperfect knowledge becomes quite severe when agents also have to learn about the structural shocks to the economy. Monetary policy can play a significant role in mitigating distortions associated with this form of imperfect knowledge.

Download or read book Adaptive Learning Long horizon Expectations and Monetary Policy written by Bruce J. Preston and published by . This book was released on 2003 with total page 185 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Adaptive Learning Model Uncertainty and Monetary Policy Inertia in a Large Information Environment written by Fabio Milani and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Due to the existence of imperfect information, central banks need to monitor a large variety of data series. This paper provides an attempt to model monetary policy-making in a large information environment. With a large information set, model uncertainty is likely to be very pervasive. We propose to model model uncertainty by means of Bayesian Model Averaging (BMA). We discuss some advantages of this technique over robust control or mere model selection. Parameters' estimates and models are updated over time through adaptive learning. In this enriched framework, we try to give an explanation of central banks' observed monetary policy inertia.

Download or read book Adaptive Learning Pesistence and Optimal Monetary Policy written by Vítor Gaspar and published by . This book was released on 2006 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Adaptive Learning Persistence and Optimal Monetary Policy written by Vítor Gaspar and published by . This book was released on 2006 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Imperfect knowledge adaptive learning and the bias against activist monetary policies written by Alberto Locarno and published by . This book was released on 2006 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Heterogeneous Expectations Adaptive Learning and Forward looking Monetary Policy written by Martin Fukac̆ and published by . This book was released on 2008 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Adaptive Learning with Applications to Monetary Policy written by Oliver Fries and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Learning and Expectational Stability under Robust Monetary Policy written by Sohei Kaihatsu and published by . This book was released on 2009 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the last few years, several articles have been devoted to the study of model uncertainty in the New Keynesian model using robust control methods. Most studies have focused on how to design a robust monetary policy to take model uncertainty more seriously. Little attention has, however, been given to expectation formation under such a robust monetary policy. The purpose of this study is to explore the expectational stability under robust monetary policy when private expectations are formed by the adaptive learning technology. We find that the economy is determinate and stable under learning if (i) private agents' expectations are observable to the central bank and appropriately incorporated into its optimal policy rules, and (ii) the central bank's preference for robustness is sufficiently weak. It follows that it is important for the central bank to consider expectational stability when it implements a robust monetary policy.

Download or read book Essays in Monetary Policy and Learning written by Gabriela Best and published by . This book was released on 2010 with total page 133 pages. Available in PDF, EPUB and Kindle. Book excerpt: My dissertation is composed by three chapters that study monetary policy, international economics, and adaptive learning. The first and third chapters estimate New Keynesian DSGE models in order to examine the fear of floating phenomenon pervasive in emerging markets and the causes of the Great Inflation in the U.S. The first chapter estimates a small open economy model for the period after the 1994 crisis in Mexico. I find that the estimation of a Taylor rule for setting nominal interest rates favors a consistent response to the short-run nominal exchange rate post 1994. These results provide evidence that Mexico suffers from fear of floating. The second and the third chapters of my dissertation contribute to the studies of the implications of adaptive learning in monetary policy. The second chapter evaluates the desirability of policy rules that respond to wage inflation in a model with staggered price and wage setting in the context of determinacy and stability under adaptive learning. I find that, when the central bank responds to wage and price inflation and to the output gap a Taylor principle for wage and price inflation arises, but it is not necessarily related to stability under learning dynamics The third chapter proposed two potential channels through which monetary policy played a role in the Great Inflation. One approach holds that monetary policymakers during the 1970s preferred stabilizing output while post 1979 they preferred inflation stabilization. An alternative explanation contends that the Federal Reserve held misperceptions about the structure of the economy. The Great Inflation analysis incorporates policymakers that are learning adaptively and in that fashion, they form erroneous beliefs about the structure of the economy. The empirical results conclude that both channels are necessary to illustrate the role played by monetary policy in propagating and ending the Great Inflation. My dissertation results support Sargent's (1999) view that adaptive learning is a relevant mechanism affecting inflation policy.

Download or read book Monetary and Fiscal Policy Design at the Zero Lower Bound written by Cars H. Hommes and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economic crisis of 2007-2008 has pushed many advanced economies into a liquidity trap. We design a laboratory experiment on the effectiveness of policy measures to avoid expectation-driven liquidity traps. Monetary policy alone is not sufficient to avoid liquidity traps, even if it preventively cuts the interest rate when inflation falls below a threshold. However, monetary policy augmented with a fiscal switching rule succeeds in escaping liquidity trap episodes. We measure the effect of fiscal policy on expectations, and report larger-than-unity fiscal multipliers at the zero lower bound. Experimental results in different treatments are well explained by adaptive learning.

Download or read book Handbook of Monetary Economics Vols 3A 3B Set written by Benjamin M. Friedman and published by Newnes. This book was released on 1990 with total page 1729 pages. Available in PDF, EPUB and Kindle. Book excerpt: How have monetary policies matured during the last decade? The recent downturn in economies worldwide have put monetary policies in a new spotlight. In addition to their investigations of new tools, models, and assumptions, they look carefully at recent evidence on subjects as varied as price-setting, inflation persistence, the private sector's formation of inflation expectations, and the monetary policy transmission mechanism. They also reexamine standard presumptions about the rationality of asset markets and other fundamentals. Stopping short of advocating conclusions about the ideal conduct of policy, the authors focus instead on analytical methods and the changing interactions among the ingredients and properties that inform monetary models. The influences between economic performance and monetary policy regimes can be both grand and muted, and this volume clarifies the present state of this continually evolving relationship. Presents extensive coverage of monetary policy theories with an eye toward questions raised by the recent financial crisis Explores the policies and practices used in formulating and transmitting monetary policies Questions fiscal-monetary connnections and encourages new thinking about the business cycle itself Observes changes in the formulation of monetary policies over the last 25 years

Download or read book Handbook of Monetary Economics written by Benjamin M. Friedman and published by Elsevier. This book was released on 2010-11-16 with total page 971 pages. Available in PDF, EPUB and Kindle. Book excerpt: "What tools are available for setting and analyzing monetary policy? World-renowned contributors examine recent evidence on subjects as varied as price-setting, inflation persistence, the private sector's formation of inflation expectations, and the monetary policy transmission mechanism. Stopping short of advocating conclusions about the ideal conduct of policy, the authors focus instead on analytical methods and the changing interactions among the ingredients and properties that inform monetary models. The influences between economic performance and monetary policy regimes can be both grand and muted, and this volume clarifies the present state of this continually evolving relationship." [source : 4e de couv.].