#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

#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...