A Dynare toolbox for social learning expectations

Alex Grimaud, Isabelle Salle and Gauthier Vermandel

Journal of Economic Dynamics and Control, 2025, vol. 172, issue C

Abstract: Social learning (SL) is a behavioral model in which expectations and the resulting aggregate dynamics stem from the interactions of a large number of heterogeneous agents. Nonetheless, this framework has so far lacked a parsimonious development with a general-solution method. This paper bridges this gap and introduces a Dynare toolbox to solve any linear state-space model with SL expectations, opening up a wide range of potential applications. As an illustration, optimal monetary policy rules are studied in a microfounded New Keynesian (NK) model under SL and rational expectations (RE).

Keywords: Inflation targeting; Monetary policy and heterogeneous expectations (search for similar items in EconPapers)
JEL-codes: E32 E52 E58 E71 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:172:y:2025:i:c:s0165188924001763

DOI: 10.1016/j.jedc.2024.104984

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