(University of Oregon, Dept of Economics, 2007-02-18) Evans, George W., 1949-; Honkapohja, Seppo, 1951-; Mitra, Kaushik
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.
