Adaptive Learning and the Cyclical Behavior of Output and Inflation

Klaus Adam

Economics Working Papers from European University Institute

Abstract: This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates by fitting econometric models to data. Agents are uncertain about which model to fit and can choose from a class of models. Only some of the models in this class are consistent with rational expectations.

Keywords: INFLATION; FORECASTS; BEHAVIOUR (search for similar items in EconPapers)
JEL-codes: E31 E32 E37 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2000
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Working Paper: Adaptive Learning and Cyclical Behavior of Output and Inflation (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:eui:euiwps:eco2000/25

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