#2008-043A "The Stability of Macroeconomic Systems with Bayesian Learners"
by James B. Bullard, and Jacek Suda
November 2008

We study abstract macroeconomic systems in which expectations play an important role. Consistent with the recent literature on recursive learning and expectations, we replace the agents in the economy with econometricans. More...

#2008-007A "When Does Determinacy Imply Expectational Stability?"
by James B. Bullard, and Stefano Eusepi
February 2008

We study the connections between determinacy of rational expectations equilibrium, and expectational stability or learnability of that equilibrium, in a relatively general New Keynesian model. More...

#2007-037B "The Optimal Inflation Target in an Economy with Limited Enforcement"
by Gaetano Antinolfi, Costas Azariadis, and James B. Bullard
September 2007
Revised November 2007

We formulate the central bank’s problem of selecting an optimal long-run inflation rate as the choice of a distorting tax by a planner who wishes to maximize discounted stationary utility for a heterogeneous population of infinitely-lived households in an economy with constant aggregate income. More...

#2007-027A "Learning and the Great Moderation"
by James B. Bullard, and Aarti Singh
June 2007

We study a stylized theory of the volatility reduction in the U.S. after 1984—the Great Moderation—which attributes part of the stabilization to less volatile shocks and another part to more difficult inference on the part of Bayesian households attempting to learn the latent state of the economy. More...

#2007-009B "A Model of Near-Rational Exuberance"
by James B. Bullard, George W. Evans, and Seppo Honkapohja
March 2007
Revised January 2008

We study how the use of judgement or “add-factors” in forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. More...

#2007-008A "Monetary Policy, Judgment and Near-Rational Exuberance"
by James B. Bullard, George W. Evans, and Seppo Honkapohja
March 2007

We study how the use of judgment or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. More...

FORTHCOMING: American Economic Review

#2007-007A "Social Learning and Monetary Policy Rules"
by Jasmina Arifovic, James B. Bullard, and Olena Kostyshyna
March 2007

We analyze the effects of social learning in a widely-studied monetary policy context. More...

#2006-040B "Worldwide Macroeconomic Stability and Monetary Policy Rules"
by James B. Bullard, and Aarti Singh
June 2006
Revised June 2007

We study the interaction of multiple large economies in dynamic stochastic general equilibrium. Each economy has a monetary policymaker that attempts to control the economy through the use of a linear nominal interest rate feedback rule. More...

#2006-038A "Monetary Policy, Determinacy, and Learnability in a Two-Block World Economy"
by James B. Bullard, and Eric Schaling
May 2006

We study how determinacy and learnability of worldwide rational expectations equilibrium may be affected by monetary policy in a simple, two country, New Keynesian framework under both fixed and flexible exchange rates. More...

#2004-025B "Near-Rational Exuberance"
by James B. Bullard, George W. Evans, and Seppo Honkapohja
October 2004
Revised September 2005

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 we call exuberance equilibria, can exist in standard macroeconomic environments. Examples include a simple asset pricing model and the New Keynesian monetary policy framework. More...