Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111919
Authors: 
Hollmayr, Josef
Matthes, Christian
Year of Publication: 
2015
Series/Report no.: 
Discussion Paper, Deutsche Bundesbank 14/2015
Abstract: 
What happens when fiscal and/or monetary policy changes systematically? We construct a DSGE model in which agents have to estimate fiscal and monetary policy rules and assess how uncertainty surrounding the conduct of policymakers influences transition paths after policy changes. We find that policy changes of the magnitude often considered in the literature can lead private agents to hold substantially different views about the nature of equilibrium than would be predicted by a full information analysis. In particular, random walk-like behavior can be observed for a large number of periods in equilibrium, even though the models we use admit stationary dynamics under full-information rational expectations.
Subjects: 
DSGE
Monetary-Fiscal Policy Interaction
Learning
JEL: 
E32
D83
E62
ISBN: 
978-3-95729-154-7
Document Type: 
Working Paper

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