Essays on Learning in Macroeconomics

Advisor: Carlos Viana de Carvalho

Co-advisor: Eduardo Zilberman

This thesis consists of three chapters. In the first one, we study how countries choose the exchange rate regime to adopt, specifically to fix or to floa. Using a model in which the policymaker is in constant learning about the regimes impacting growth and inflation in other countries, we find intuitive connections between the arrangement's choices and related economic variables. For instance, low international reserves encourage the adoption of floating regime. Furthermore, policymakers are more certain about the information coming from geographically closer countries. In the second one, we model how consumers form inflation expectations. Every period, the consumer weighs his expectation between the forecast from professionals and from its own model. For the latter, we assume an adaptive learning approach, which is essential to deal with the inflationary memory present on consumers' behavior. The data generated by the model fits well the observed data. Moreover, we find evidence that the more the consumer absorbs news about inflation, the more he weights on the inflation prediction made by professionals. Finally, in the third chapter, we explore the model proposed in the second one to investigate the relationship between central bank transparency and predictability of inflation of professionals and consumers. Using a panel data, we find evidence that a higher degree of transparency of the central bank improves inflation forecast of consumers, but does not affect the forecast of professionals.