Theories of learning and economic policy
Abstract
The benchmark rational expectations (RE) assumption both assumes an unrealistic degree of rationality for economic agents and fails to address how agents would come to coordinate on an equilibrium. This essay reviews how theories of learning, and more specifically adaptive learning, address these issues and can lead to policy conclusions distinct from those obtained under RE. Applications discussed include monetary policy in New Keynesian models, the neo-Fisherian policy view, inflation targets, hyperinflation models, and macroeconomic policy to avoid stagnation at the zero lower bound.
Citation
Evans , G W 2021 , ' Theories of learning and economic policy ' , Revue d'Economie Politique , vol. 131 , no. 3 , pp. 583-608 . https://doi.org/10.3917/redp.313.0265
Publication
Revue d'Economie Politique
Status
Peer reviewed
ISSN
0373-2630Type
Journal article
Rights
Copyright 2021 Editions Dalloz. This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.3917/redp.313.0265
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