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Learning About Monetary Policy Rules

We study macroeconomic systems with forward-looking private sector agents and a monetary authority that is trying to control the economy through the use of a linear policy feedback rule. We use stability under recursive learning a la Evans and Honkapohja (2001) as a criterion for evaluating monetary policy rules in this context. We find that considering learning can alter the evaluation of alternative policy rules.

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https://doi.org/10.20955/wp.2000.001

https://doi.org/10.1016/s0304-3932(02)00144-7