D8 - Information, Knowledge, and Uncertainty - Bank of Canada
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Bank of Canada RSS Feedsen2024-03-29T07:38:09+00:00Behavioral Learning Equilibria in New Keynesian Models
https://www.bankofcanada.ca/2022/09/staff-working-paper-2022-42/
We introduce behavioral learning equilibria (BLE) into DSGE models with boundedly rational agents using simple but optimal first order autoregressive forecasting rules. The Smets-Wouters DSGE model with BLE is estimated and fits well with inflation survey expectations. As a policy application, we show that learning requires a lower degree of interest rate smoothing.2022-09-22T12:58:42+00:00enBehavioral Learning Equilibria in New Keynesian Models2022-09-22Business fluctuations and cyclesEconomic modelsInflation and pricesMonetary policyStaff Working Paper 2022-42https://www.bankofcanada.ca/wp-content/uploads/2022/09/swp2022-42.pdfStaff Working Paper 2022-42Cars HommesKostas MavromatisTolga Ă–zdenMei ZhuSeptember 2022CC1C11DD8D83D84EE3E6E62