 Optimal Monetary Policy Rules: The Problem of Stability Under Heterogeneous LearningAnna Bogomolova and Dmitri Kolyuzhnov CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague Abstract: In this paper we extend the analysis of optimal monetary policy rules in terms of stability of an economy, started by Evans and Honkapohja (2003b), to the case of heterogeneous private agents learning. Following Giannitsarou (2003), we pose the question about the applicability of the representative agent hypothesis to learning. This hypothesis was widely used in learning literature at early stages to demonstrate convergence of an economic system under adaptive learning of agents to one of the rational expectations equilibria in the economy. We test these monetary policy rules in the general setup of the New Keynesian model that is a work horse of monetary policy models today. It is of interest to see that the results obtained by Evans and Honkapohja (2003b) for the homogeneous learning case are replicated for the case when the representative agent hypothesis is lifted. Keywords: Monetary policy rules; new Keynesian model; adaptive learning; stability of equilibrium; heterogeneous agents. (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp379 Access Statistics for this paper More papers in CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague Contact information at EDIRC. |
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