Two-sided learning and short-run dynamics in a New Keynesian model of the economy

Christian Matthes and Francesca Rondina

Economics Letters, 2017, vol. 159, issue C, 53-56

Abstract: We investigate the role of asymmetric information and learning in a New Keynesian framework in which private agents and the central bank have imperfect knowledge of the economy. We assume that agents employ the data that they observe to form beliefs about the relationships that they do not know, use their beliefs to decide on actions, and revise these beliefs through a statistical learning algorithm as new information becomes available. Using simulations, we show that asymmetric information and learning can significantly change the dynamics of the variables of the model.

Keywords: Asymmetric information; Learning; Expectations; Monetary policy (search for similar items in EconPapers)
JEL-codes: E37 E47 E52 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176517302689
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Two-sided Learning and Short-Run Dynamics in a New Keynesian Model of the Economy (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:159:y:2017:i:c:p:53-56

DOI: 10.1016/j.econlet.2017.06.041

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().