Now showing items 1-20 of 20

    • Adaptive Learning and Monetary Policy Design 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-11-08)
      We review the recent work on interest rate setting, which emphasizes the desirability of designing policy to ensure stability under private agent learning. Appropriately designed expectations based rules can yield optimal ...
    • Anticipated Fiscal Policy and Adaptive Learning 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951-; Mitra, Kaushik (University of Oregon, Dept of Economics, 2007-02-18)
      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 ...
    • Are Stationary Hyperinflation Paths Learnable? 

      Adam, Klaus; Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2003-03-17)
      Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized ...
    • Does Ricardian Equivalence Hold When Expectations are not Rational? 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951-; Mitra, Kaushik, 1969- (University of Oregon, Dept of Economics, 2010-08-04)
      This paper considers the Ricardian Equivalence proposition when expectations are not rational and are instead formed using adaptive learning rules. We show that Ricardian Equivalence continues to hold provided suitable ...
    • The E-Correspondence Principle 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2003-06-23)
      We introduce the E-correspondence principle for stochastic dynamic expectations models as a tool for comparative dynamics analysis. The principle is applicable to equilibria that are stable under least squares and closely ...
    • Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-04-06)
      We examine the nonlinear model x_t = E_t F(x_(t+1)). Markov SSEs exist near an indeterminate steady state, hat(x)=F(hat(x)), provided |F'(hat(x)| > 1. Despite the importance of indeterminancy in macroeconomics, earlier ...
    • Expectational Stability of Stationary Sunspot Equilibria in a Forward-looking Linear Model 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-01-14)
      We consider the stability under adaptive learning of the complete set of solutions to the model x_i=beta(Ei*)(x_i+1) when |beat| >1. In addition to the fundamentals solution, the literature describes both finite-state ...
    • Expectations and the Stability Problem for Optimal Monetary Policies 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2001-08-03)
      A fundamentals based monetary policy rule, which would be the optimal monetary policy without commitment when private agents have perfectly rational expectations, is unstable if in fact these agents follow standard adaptive ...
    • Expectations, Deflation Traps and Macroeconomic Policy 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2009-07-06)
      We examine global economic dynamics under infinite-horizon learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), we find that under ...
    • Friedman's Money Supply Rule versus Optimal Interest Rate Policy 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2003-07-12)
      Using New Keynesian models, we compare Friedman's k-percent money supply rule to optimal interest rate setting, with respect to determinacy, stability under learning and optimality. First we review the recent literature: ...
    • Generalized Stochastic Gradient Learning 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2005-09-19)
      We study the properties of generalized stochastic gradient (GSG) learning in forwardlooking models. We examine how the conditions for stability of standard stochastic gradient (SG) learning both differ from and are related ...
    • An Interview with Thomas J. Sargent 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2005-01-11)
      This is the text of an interview with Thomas J. Sargent. The interview will be published in Macroeconomic Dynamics.
    • Learning and Macroeconomics 

      Honkapohja, Seppo, 1951-; Evans, George W., 1949- (University of Oregon, Dept of Economics, 2008-07-11)
      Expectations play a central role in modern macroeconomic theories. The econometric learning approach models economic agents as forming expectations by estimating and updating forecasting models in real time. The learning ...
    • Liquidity Traps, Learning and Stagnation 

      Evans, George W., 1949-; Guse, Eran A. (Eran Alan), 1975-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2007-06-05)
      We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally ...
    • Monetary Policy, Expectations and Commitment 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2005-04-06)
      This is a revised and shortened version of Working Paper 2002-11. Commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies. A number of interest rate reaction functions ...
    • Monetary policy, expectations and commitment 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-05-22)
      Commitment in monetary policy leads to equilibria that are superior to those from optimal discretionary policies. A number of interest rate reaction functions and instrument rules have been proposed to implement or approxmiate ...
    • Near-Rational Exuberance 

      Bullard, James; Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept of Economics, 2005-09-17)
      We study how the use of judgement or "add-factors" in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which ...
    • Policy Interaction, Expectations and the Liquidity Trap 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2003-04-30)
      We consider inflation and government debt dynamics when monetary policy employs a global interest rate rule and private agents forecast using adaptive learning. Because of the zero lower bound on interest rates, active ...
    • Policy Interaction, Learning and the Fiscal Theory of Prices 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951- (University of Oregon, Dept. of Economics, 2002-08-03)
      We investigate both the rational explosive inflation paths studied by (McCallum 2001), and the classification of fiscal and monetary polices proposed by (Leeper 1991), for stability under learning of the rational expectations ...
    • Stable Sunspot Equilibira in a Cash-in-Advance Economy 

      Evans, George W., 1949-; Honkapohja, Seppo, 1951-; Marimon, Ramon, 1953- (University of Oregon, Dept. of Economics, 2002-10-25)
      We develop a monetary model with flexible supply of labor, cash in advance constraints and government spending financed by seignorage. This model has two regimes. One regime is conventional with two steady states. The other ...