The paper introduces some simplifying tools and methods for studying Rational Beliefs and for proving existence of Rational Belief Equilibria: We identify a set of stable non-stationary stochastic processes, named SIDS processes. Furthermore we introduce the concept of a Rational Belief...

The paper shows that the set of stable probability measures and the set of Rational Beliefs relative to a given stationary measure are closed in the strong topology, but not closed in the topology of weak convergence. However, subsets of the set of stable probability measures which are...

The paper introduces some simplifying tools and methods for studying Rational Beliefs and for proving existence of Rational Belief Equilibria. We identify a set of stable non-stationary stochastic processes, named SIDS processes. Furthermore we introduce the concept of a Rational Belief...

Is an assumption of bounded rationality needed to explain Social Security and other mandatory pension plans? In this contribution we argue that when rational agents hold inconsistent expectations such programs may be justified. Two of the features that distinguish Social Security and many other...

Is an assumption of bounded rationality needed to explain Social Security and other mandatory pension plans? In this contribution we argue that when rational agents hold inconsistent expectations such programs may be justified. Two of the features that distinguish Social Security and many other...

Is an assumption of bounded rationality needed to explain Social Security and other mandatory pension plans? In this contribution we argue that when rational agents hold inconsistent expectations such programs may be justified. Two of the features that distinguish Social Security and many other...

In this two country OLG model there is a potential role for active governments since markets are incomplete. There are many coordinated policies (exchange rate regimes) that result in an optimal allocation if extrinsic uncertainty plays no role. However, if we take into account the possibility...

The Rational Beliefs Theory is founded on the observation that in most situations the same data may be rationally explained (in terms of a statistical model) in many different ways. This is obvious in a world where there is a limited number of observations. The novel idea of the Rational Beliefs...

The Rational Beliefs Theory is founded on the observation that in most situations the same data may be rationally explained (in terms of a statistical model) in many different ways. This is obvious in a world where there is a limited number of observations. The novel idea of the Rational Beliefs...

By means of an example, it is demonstrated how rational beliefs may be incorporated into a Bayesian learning model. The empirical distribution is learned over time and the subjective rational belief is modified accordingly.