We consider a simple market environment in which traders with finite memory update forecasting rules at random intervals by OLS. In this context, changes in the perception of market risk can trigger volatility and bubbles. Consequently, higher degrees of risk response among traders can have a...

We consider the effect of adaptive model selection and regularization by agents on price volatility and market stability in a simple agent-based model of a financial market. The agents base their trading behavior on forecasts of future returns, which they update adaptively and asynchronously...

We consider an environment in which traders search for trading opportunities and update their forecast rules at random intervals. The staggering of this updating process across traders allows differences in opinion to persist over time, generating non-trivial price dynamics

We consider an environment in which traders with finite memory update their forecast rules at random intervals by OLS. In this context, overparameterization of the forecast rules can destabilize the learning dynamics. This instability tends to be attenuated by greater memory and less frequent...

This note develops an efficiency wage model which displays persistent cycles under perfect foresight. Limit cycles arise from the dependence of current labor supply on both recent labor market conditions and the expected rate of job creation.

This note develops an efficiency wage model which displays persistent cycles under perfect foresight. Limit cycles arise from the dependence of current labor supply on both recent labor market conditions and the expected rate of job creation.

We explore the consequence of learning to forecast in a very simple environment. Agents have bounded memory and incorrectly believe that there is nonlinear structure underlying the aggregate time series dynamics. Under social learning with finite memory, agents may be unable to learn the true...

This paper explores the relationship between product innovation and consumption inequality. We employ a modified version of the agent-based macroeconomic model in Georges (2011, 2015). A rise in rents accruing to salaried workers can shift both production and R&D spending toward products...

We develop an agent-based macroeconomic model in which product innovation is the fundamental driver of growth and business cycle fluctuations. The model builds on a hedonic approach to the product space and product innovation developed in Georges (2011)