Social learning expectations: microfoundations and a Dynare toolbox

Alex Grimaud, Isabelle Salle and Gauthier Vermandel

No 339, Department of Economics Working Paper Series from WU Vienna University of Economics and Business

Abstract: Social learning (SL) is a behavioral model in which expectations and the resulting aggregate dynamics stem from the interactions of a large amount of heterogeneous agents. Nonetheless, this framework has so far lacked micro-foundations and a general-solution method. This paper bridges these two gaps with: (i) a micro-founded New Keynesian model with social learning expectations; (ii) a general solution method that we implement in a Dynare toolbox that solves any linear state- space model with SL expectations. The resulting framework provides a self-contained tool to contrast policy analysis under SL and rational expectations. As an illustration, optimal monetary policy rules are studied under the two expectation regimes.

Keywords: Inflation targeting; Monetary policy; Heterogeneous expectations (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://research.wu.ac.at/en/publications/70a0ca9f-2669-4934-b43c-a888b5ae1dac original version (application/pdf)

Related works:
Working Paper: Social learning expectations: microfoundations and a Dynare toolbox (2023)
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:wiw:wus005:44832174

Access Statistics for this paper

More papers in Department of Economics Working Paper Series from WU Vienna University of Economics and Business Welthandelsplatz 1, 1020 Vienna, Austria.
Bibliographic data for series maintained by WU Library ().