Expectation traps and Neo-Fisherian policy
University of Illinois at Chicago
Three-period overlapping generations New Keynesian model with borrowing constraints, heterogeneous agents (young, middle-aged, old), incomplete markets, and non-rational subjective expectations formation including adaptive learning and extrapol
monopolistic competition with linear production technology in labor; Calvo or Rotemberg price rigidity
Low inflation steady state pi_L = 1/R* at ZLB expectation trap equilibrium