A framework for the analysis of self-confirming policies.
P BattigalliS Cerreia-VioglioFabio MaccheroniM MarinacciT SargentPublished in: Theory and decision (2022)
This paper provides a general framework for analyzing self-confirming policies. We study self-confirming equilibria in recurrent decision problems with incomplete information about the true stochastic model. We characterize stationary monetary policies in a linear-quadratic setting.