Robust Stability of Monetary Policy Rules under Adaptive Learning

Eric Gaus

Southern Economic Journal, 2013, vol. 80, issue 2, 439-453

Abstract: Recent research has explored how minor changes in expectation formation can change the stability properties of a model (; ). This article builds on this research by examining an economy subject to a variety of monetary policy rules under an endogenous learning algorithm proposed by . The results indicate that operational versions of optimal discretionary rules are not robustly stable, as in . In addition, commitment rules are not robust to minor changes in expectational structure and parameter values.

Date: 2013
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https://doi.org/10.4284/0038-4038-2012.071

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:80:y:2013:i:2:p:439-453

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