Robust Stability of Monetary Policy Rules under Adaptive Learning

Eric Gaus

Working Papers from Ursinus College, Department of Economics

Abstract: Recent research has explored how minor changes in expectation formation can change the stability properties of a model (Duffy and Xiao 2007, Evans and Honkapoja 2009). This paper builds on this research by examining an economy subject to a variety of monetary policy rules under an endogenous learning algorithm proposed by Marcet and Nicolini (2003). The results indicate that operational versions of optimal discretionary rules are not "robustly stable" as in Evans and Honkapoja (2009). In addition commitment rules are not robust to minor changes in expectational structure and parameter values.

Keywords: Learning; Rational Expectations; Monetary Policy Rules (search for similar items in EconPapers)
JEL-codes: D83 E52 (search for similar items in EconPapers)
Pages: pages
Date: 2012-07-12, Revised 2012-12-14
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published

Downloads: (external link)
http://webpages.ursinus.edu/egaus/Research/GausPolicyInstability.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to webpages.ursinus.edu:80 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:urs:urswps:13-01

Access Statistics for this paper

More papers in Working Papers from Ursinus College, Department of Economics Ursinus College 601 East Main St. Collegeville, PA 19426. Contact information at EDIRC.
Bibliographic data for series maintained by Eric Gaus ( this e-mail address is bad, please contact ).