Diverse Private Expectations

Understanding the Distribution of Inflation Expectations

Inflation expectations are central to monetary policy but are often summarized by a single statistic such as the mean or median forecast. This article argues for a distributional view in which the full cross-sectional distribution of beliefs is the relevant object. We first organize the literature around the main distr...

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Dynamic Stochastic General Equilibrium Approach on the Analysis of Monetary Policy Shocks on Economic Variables

This study estimates a first-order Dynamic Stochastic General Equilibrium (DSGE) to examine the structural dynamics of macroeconomic variables in response to policy and external shocks within context of Nigeria. The model reveals significant intertemporal behavior, with a discount factor β of 0.51, indicating moderate...

Journal of Economic Dynamics & Control

History-dependent monetary policy: a lab experiment and a HENK model

Price-level targeting (PLT) is theoretically optimal under the full information rational expectations (FIRE) benchmark but has not been implemented in practice. We use a laboratory experiment to collect data on expectations, inflation and output dynamics under a traditional inflation targeting (IT) framework and a PL...

Designing Optimal Policy Rules Under Parameter Uncertainty: A Stochastic Dominance Approach

Abstract This paper proposes a novel Bayesian decision-theoretic framework for ranking and selecting simple macroeconomic policy rules in linear rational expectations models under structural parameter uncertainty. Unlike standard approaches that rely on point estimates, expected welfare losses, or worst-case scenarios,...