Can an AI agent hit a moving target?
Not on the map. Why?
Abstract (arXiv)
I model the belief formation and decision making processes of economic agents during a monetary policy regime change (an acceleration in the money supply) with a deep reinforcement learning algorithm in the AI literature. I show that when the money supply accelerates, the learning agents only adjust their actions, which include consumption and demand for real balance, after gathering learning experience for many periods. This delayed adjustments leads to low returns during transition periods. Once they start adjusting to the new environment, their welfare improves. Their changes in beliefs and actions lead to temporary inflation volatility. I also show that, 1. the AI agents who explores their environment more adapt to the policy regime change quicker, which leads to welfare improvements and less inflation volatility, and 2. the AI agents who have experienced a structural change adjust their beliefs and behaviours quicker than an inexperienced learning agent.
Key facts. Cited by 3 papers in the map (data through 7 Oct 2026). Builds on 5 of its 43 references that are in the map. First posted on arXiv 6 Oct 2021.
Builds on
5 of 43 references.
References · 5
- 2015Continuous control with deep reinforcement learningcited by 3,279
- 2013Playing Atari with Deep Reinforcement Learningcited by 3,211
- 2021Deep Reinforcement Learning in a Monetary Modelcited by 10
- 2021Solving Heterogeneous General Equilibrium Economic Models with Deep Reinforcement Learningcited by 9
- 2020Stable Reinforcement Learning with Unbounded State Spacecited by 8
Built on by
Citing papers per year: 2024: 1; 2025: 2.
3 papers.