This paper investigates the learnability of the equilibrium under adaptive learning with heterogeneous and misspecified models. Agents have imperfect and mutually different information sets of economic variables, so they form heterogeneous expectations under learning rules that are differently underparameterized. Under heterogeneous learning, the economy converges to a type of restricted percep...

We study the e¤ects of progressive labor income taxation in an otherwise standard NK model. We show that progressive taxation (i) introduces a trade-o¤ between output and in‡ation stabilization and a¤ects the slope of the Phillips Curve; (ii) acts as automatic stabilizer changing the responses to technology shocks and demand shocks (iii) alters the prescription for the optimal monetary policy. ...

I apply mechanism design to quantify the cost of in‡ation that can be attributed to monetary frictions alone. In an environment with pairwise meetings, the money demand that is consistent with an optimal, incentive feasible allocation takes the form of a continuous correspondence that can …t the data over the period 1900-2006. For such parameterizations, the cost of moderate in‡ation is zero. T...

Studies have shown that corporate social performance (CSP) is an antecedent of reputation, acting as a signal affects stakeholders’ perceptions and expectations about firm’s future behavior. However, the perceptions, expectations, interests stakeholders may be affected by external factors, such national culture, which shapes their beliefs what role companies play in society. Drawing on institut...

Empirical work in macroeconomics almost universally relies on the hypothesis of rational expectations. This paper departs from the literature by considering a variety of alternative expectations formation models. We study the econometric properties of a popular New Keynesian monetary DSGE model under different expectational assumptions: the benchmark case of rational expectations, rational expe...