Expectations, learning gains, and forecast errors: Assessing nonlinearities with a functional coefficient approach

Fabio Milani

Economics Letters, 2025, vol. 256, issue C

Abstract: This paper investigates potential nonlinearities in the gain function, which, under adaptive learning, regulates the updating of agents’ beliefs in response to recent forecast errors.

Keywords: Survey forecasts; Nonlinear gain; Adaptive learning; Nonparametric regression; Functional coefficient regression model (search for similar items in EconPapers)
JEL-codes: C14 E31 E32 E70 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:256:y:2025:i:c:s0165176525004495

DOI: 10.1016/j.econlet.2025.112612

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