Eductive Stability in Real Business Cycle Models
Résumé
Within the standard real business cycle model, we examine issues of expectational coordination on the unique rational expectations equilibrium. We show sensitivity of agents’ plans and decisions to their short‐run and long‐run expectations is too great to trigger eductive coordination in a world of rational agents who are endowed with knowledge of the economic structure and contemplate the possibility of small deviations from equilibrium: eductive stability never obtains. We conclude adaptive learning must play a role in real‐time dynamics. Our eductive instability theorem has a counterpart under adaptive learning: even with asymptotic stability, transition dynamics can involve large departures from rational expectations.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Titre |
en
Eductive Stability in Real Business Cycle Models
|
Résumé |
en
Within the standard real business cycle model, we examine issues of expectational coordination on the unique rational expectations equilibrium. We show sensitivity of agents’ plans and decisions to their short‐run and long‐run expectations is too great to trigger eductive coordination in a world of rational agents who are endowed with knowledge of the economic structure and contemplate the possibility of small deviations from equilibrium: eductive stability never obtains. We conclude adaptive learning must play a role in real‐time dynamics. Our eductive instability theorem has a counterpart under adaptive learning: even with asymptotic stability, transition dynamics can involve large departures from rational expectations.
|
Auteur(s) |
George Evans
1, 2
, Roger Guesnerie
3, 4, 5
, Bruce Mcgough
1
1
OSU -
Oregon State University
( 489548 )
- 1500 SW Jefferson St., Corvallis, OR 97331
- États-Unis
2
University of St Andrews [Scotland]
( 14827 )
- St Andrews KY16 9AJ, Fife, Scotland, UK
- Royaume-Uni
3
PJSE -
Paris Jourdan Sciences Economiques
( 1171428 )
- 48 boulevard Jourdan 75014 Paris
- France
4
PSE -
Paris School of Economics
( 301309 )
- 48 boulevard Jourdan 75014 Paris
- France
5
CdF (institution) -
Collège de France
( 300026 )
- France
|
Date de publication |
2019-02
|
Langue du document |
Anglais
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Volume |
129
|
Numéro |
618
|
Page/Identifiant |
821-852
|
Domaine(s) |
|
DOI | 10.1111/ecoj.12620 |
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