Under the assumption of bounded rationality, economic agents learn from their past
mistaken predictions by combining new and old information to form new beliefs. The
purpose of this paper is to investigate how the policy-maker, by affecting private
agents’ learning process, determines the speed at which the economy converges
to the rational expectation equilibrium. I find that by reacting strongly to private
agents’ expected inflation, a central bank increases the speed of convergence
and shortens the length of the transition to the rational expectation equilibrium.
I use speed of convergence as an additional criterion for evaluating alternative
monetary policies. I find that a fast convergence is not always desirable.
статьи представлена на сайте ScienceDirect. Полный текст статьи находится в закрытом