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Adaptive Learning and the Cyclical Behavior of Output and Inflation

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  • Adam, K.

Abstract

This paper considers a sticky price model with a cash-in-advance constraint where agents forecast inflation rates by fitting econometric models to data. Agents are uncertain about which model to fit and can choose from a class of models. Only some of the models in this class are consistent with rational expectations.

Suggested Citation

  • Adam, K., 2000. "Adaptive Learning and the Cyclical Behavior of Output and Inflation," Economics Working Papers eco2000/25, European University Institute.
    • Handle: RePEc:eui:euiwps:eco2000/25
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    Cited by:

    1. Klaus Adam, 2003. "Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(4), pages 887-907.
    2. Klaus Adam, 2004. "Should macroeconomists consider restricted perception equilibria? Evidence from the experimental laboratory," Computing in Economics and Finance 2004 338, Society for Computational Economics.

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    More about this item

    Keywords

    INFLATION ; FORECASTS ; BEHAVIOUR;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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