Anticipated Fiscal Policy and Adaptive Learning

George William Evans (), Seppo Mikko Sakari Honkapohja () and Kaushik Mitra ()

CDMA Working Paper Series from Centre for Dynamic Macroeconomic Analysis

Abstract: We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations. To model this we assume that agents combine limited structural knowledge with a standard adaptive learning rule. We analyze these issues using two well-known set-ups, an endowment economy and the Ramsey model. In our set-up there are important deviations from both rational expectations and purely adaptive learning. Our approach could be applied to many macroeconomic frameworks.

Keywords: Taxation; expectations; Ramsey model. (search for similar items in EconPapers)
JEL-codes: E62 D84 E21 E43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-knm, nep-mac and nep-pbe
Date: 2007-08
View list of references

Downloads: (external link)
http://www.st-andrew ... MA/papers/wp0717.pdf (application/pdf)

Related works:
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2007)
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2007)
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in CDMA Working Paper Series from Centre for Dynamic Macroeconomic Analysis
Address: School of Economics and Finance, University of St. Andrews, Fife KY16 9AL
Contact information at EDIRC.
Series data maintained by Johannes Geissler ().