Representations and Sunspot Stability

By endowing his agents with simple forecasting models, or representations, Woodford (1990) found that finite state Markov sunspot equilibria may be stable under learning. We show that common factor representations generalize to all sunspot equilibria the representations used by Woodford (1990). We find that if finite state Markov sunspots are stable under learning then all sunspots are stable under learning, provided common factor representations are used.

MoreLess

Year of publication:	2007-01-01
Authors:	Evans, George W. ; McGough, Bruce
Institutions:	Department of Economics, University of Oregon
Subject:	Indeterminacy \| Sunspot Equilibria \| E-stability

More details

Extent:	application/pdf
Series:	University of Oregon Economics Department Working Papers.
Type of publication:	Book / Working Paper
Notes:	8 pages long
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E32 - Business Fluctuations; Cycles ; D83 - Search, Learning, Information and Knowledge ; D84 - Expectations; Speculations
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005635090