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THE APPRENTICE WIZARD: MONTETARY POLICY, COMPLEXITY AND LEARNING

Institute of Quantitative Methods and Economic Theory, Catholic University of Milan, Largo Gemelli1, I-20123, Milan, Italy

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EDOARDO GAFFEO

Department of Economics and CEEL, University of Trento, Via Inama 5, I-38100 Trento, Italy

Corresponding author.

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MAURO GALLEGATI

Department of Economics, Polytechnic University of Marche, Piaz.le Martelli 8, I-60121, Ancona, Italy

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, and

ANTONIO PALESTRINI

Department of Law in Society and History, University of Teramo, Via Crucidi 122, I-64100 Teramo, Italy

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https://doi.org/10.1142/S1793005705000068Cited by:21 (Source: Crossref)

Abstract

This paper investigates some central issues of monetary policy by offering a model in which a central bank tries to stabilize fluctuations in aggregate output and inflation in an adaptive complex economy. We resort to evolutionary algorithms to model the central bank behaviour under discretion, and confront the efficiency of discretion with the choice of full commitment to a fixed rule.

Keywords:

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