This chapter gives an overview of the recent literature on indeterminacy and sunspots in macroeconomics. It discusses of some of the conceptual and the technical aspects of this literature, and provides a simple framework for illustrating the mechanisms of various dynamic equilibrium models that...

This paper reviews a framework for numerically analyzing dynamic interactions in imperfectly competitive industries. The framework dates back to Ericson and Pakes [1995. Review of Economic Studies 62, 53–82], but it is based on equilibrium notions that had been available for some time before,...

Local interactions refer to social and economic phenomena where individuals' choices are influenced by the choices of others who are close to them socially or geographically. This represents a fairly accurate picture of human experience. Furthermore, since local interactions imply particular...

Multiplicity of equilibria is a common problem in many economic models. In general, it is impossible to devise methods that always find all equilibria for any type of model. A notable exception are models in which all equilibria are solutions to a system of polynomial equations since there are...

Global games with endogenous information often exhibit multiple equilibria. In this paper we show how one can nevertheless identify useful predictions that are robust across all equilibria and that could not have been delivered in the common-knowledge counterparts of these games. Our analysis is...