Recursive least squares learning is a central concept employed in selecting amongst competing outcomes of dynamic …

either least squares learning or gradient learning for determining the price. We demonstrate that convergence properties of … learning gives higher average profit than least squares learning, making firms switch to gradient learning. This can … destabilize gradient learning which, because of decreasing profits, makes firms switch back to least squares learning. …

resolution of the puzzle based on recursive least squares learning applied to a simple model of exchange rate determination. The …

conditions for a determinate rational expectations equilibrium (REE) that also is stable under least squares learning are in … after being hit by a shock. Findings – The paper finds that a determinate REE that also is stable under least squares … learning often is the outcome when there is a limited amount of trend following in currency trading, but that a more flexible …

conditions for a determinate rational expectations equilibrium (REE) that also is stable under least squares learning are in … after being hit by a shock. Findings – The paper finds that a determinate REE that also is stable under least squares … learning often is the outcome when there is a limited amount of trend following in currency trading, but that a more flexible …