Endogenous fluctuations in a bounded rationality economy: learning non-perfect foresight equilibria
Article Abstract:
Forward-looking economic models that assumed agents take one step ahead expectations looking back k time periods were studied. The coexistence of perfect foresight and nonperfect foresight cycles characterized the dynamics of the economy with such an expectation function. The stability of the perfect foresight cycles is related to the stability of all the periodic solutions under bounded rationality. The results showed that under bounded rationality, the dynamics of a forward-looking economic model may converge to a non-perfect foresight cycle attractor.
Publication Name: Journal of Economic Theory
Subject: Economics
ISSN: 0022-0531
Year: 1999
User Contributions:
Comment about this article or add new information about this topic:
Robust economic models
Article Abstract:
A study of robust economic models focuses on two problem areas. These are the use of the main analytic approach and the methods for adapting the basic techniques to the side conditions. In the study, signed directed graphs (diagraps) were evaluated as a main analytic tool in qualitative analyses. The parameters and conditions where digraphs can be used are presented. In addition, the extension of graph-theoretic methods for use in conditions are presented.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1995
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Diagnostics for evaluating the value and rationality of economic forecasts. A note on musgrave asymmetrical trend-cycle filters
- Abstracts: Industrialization and substitutability: a note. Subjective temporary equilibrium. Real options and preemption under incomplete information
- Abstracts: Value function approximation in the presence of uncertainty and inequality constraints: an application to the demand for credit cards
- Abstracts: Chaotic dynamics in a cash-in-advance economy. Testing for sunspot equilibria in the German hyperinflation. On information and market dynamics: The case of the U.S. beef market
- Abstracts: Tests for bounded rationality with a linear dynamic model distorted by heterogeneous expectations. Adaptive learning of rational expectations using neural networks