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Learning and the central bank
Charles Carlstrom ()
Timothy S. Fuerst
Working Paper from Federal Reserve Bank of Cleveland
It is well known that sunspot equilibria may arise under an interest-rate operating procedure in which the central bank varies the nominal rate with movements in future inflation (a forward-looking Taylor rule). This paper demonstrates that these sunspot equilibria may be learnable in the sense of E-stability.
Keywords: Banks and banking, Central; Monetary policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mon and nep-pke
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Related works: Journal Article: Learning and the central bank (2004) This item may be available elsewhere in EconPapers: Search for items with the same title.
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Persistent link: http://EconPapers.repec.org/RePEc:fip:fedcwp:0117
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