Rational vs. long-run forecasters: Optimal monetary policy and the role of inequality
Giovanni Di Bartolomeo () and
Carolina Serpieri ()
wp.comunite from Department of Communication, University of Teramo
This paper builds a stylized simple sticky-price New Keynesian model where agents' beliefs are not homogeneous. We assume that agents choose optimal plans while considering forecasts of macroeconomic conditions over an infinite horizon. A fraction of them (boundedly rational agents) use heuristics to forecast macroeconomic variables over an infinite horizon. In our framework, we study optimal policies consistent with a second-order approximation of the policy objective from the consumers' utility function, assuming that the steady state is not distorted.
New Economics Papers: this item is included in nep-mon and nep-upt
References: Add references at CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:00129
Access Statistics for this paper
More papers in wp.comunite from Department of Communication, University of Teramo
Bibliographic data for series maintained by Giovanni Di Bartolomeo ().