Policy change and learning in the RBC model

Abstract

What is the impact of surprise and anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations? We examine this issue using the standard stochastic real business cycle model with lump-sum taxes. Agents combine knowledge about future policy with econometric forecasts of future wages and interest rates… (More)

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Cite this paper

@inproceedings{Mitra2011PolicyCA, title={Policy change and learning in the RBC model}, author={Kaushik Mitra and Seppo Honkapohja and George W. Evans}, year={2011} }