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Anticipated Fiscal Policy and Adaptive Learning

George Evans (), Seppo Honkapohja () and Kaushik Mitra ()

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations. To model this we assume that agents combine limited structural knowledge with a standard adaptive learning rule. We analyze these issues using two well-known set-ups, an endowment economy and the Ramsey model. In our set-up there are important deviations from both rational expectations and purely adaptive learning. Our approach could be applied to many macroeconomic frameworks.

Keywords: Taxation; expectations; Ramsey model (search for similar items in EconPapers)
JEL-codes: E62 D84 E21 E43 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-knm, nep-mac and nep-pbe
Date: 2007-02
Note: Ec
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Related works:
Journal Article: Anticipated fiscal policy and adaptive learning (2009) Downloads
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2008) Downloads
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2007) Downloads
Working Paper: Anticipated Fiscal Policy and Adaptive Learning (2007) Downloads
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