D:\Inetpub\shared\yedion\syllabus\10\2014\1011\1011456301_desc.txtMacroeconomic policymaking confronts two challenges. First, policymakers do not know the economy's actual data-generating process (DGP). Second, their beliefs typically feedback to influence the model, which makes DGP endogenous. Modeling the policy maker as a boundedly rational agent, we analyze the dynamics of US inflation post World War II, and offer a coherent story about the complex dynamics of US inflation within a unified framework of learning and model validation. Along the way, we examine and reconcile two influential, yet conflicting, views on US inflation by Thomas J. Sargent and Christopher Sims.