The purpose of this paper is to study the influence of the elasticity of capital-labour substitution and of the labour supply elasticity on the existence of multiple Pareto-ranked stationary eqilibria, local indeterminacy, bifurcations and expectations driven fluctuations in economies with...

In discrete three-dimensional dynamical systems frequently encountered in dynamic general equilibrium models, local indeterminacy -sunspot equilibria - and local bifurcations -endogenous deterministic fluctuations - issues are quite difficult to handle. Pitfalls derive from the fact that in...

We develop a model which accounts for the observed equity premium and average risk free rate, without implying counterfactually high risk aversion. The model also does well in accounting for business cycle phenomena.

This paper attempts to identify, in a framework deliberately stripped of unnecessary technicalities, some of the basic reasons why adaptative learning may or may not lead to stability and convergence to self-fulfilling expectations in large socioeconomic systems where no agent, or collection of...

Learning with bounded memory in stochastic frameworks is incomplete in the sense that the learning dynamics cannot converge to an REE. The properties of the dunamics arising from such rules are studied for models with steady states. If in standard linear models the REE is in a certain sense...

We investigate the role of information spillovers (IS) in determining firms' labor adjustments. We test the proposition that information on relevant state variables spills over through one firm's decision th those of other firms, assuming that spillovers matter only among frims that are both...