Learning in Overlapping Generations Models
We consider a standard two generations version of the overlapping generations model with different learning algorithms. Agents predict inflation rates on the basis of some mis-specified (linear) perceived law of motion, which is estimated by running a regression on past prices or inflation rates. Beleifs might converge, although inflation rates keep on fluctuating. These fluctuations are, in some sense, consistent with the (mis-specified) limit belief.
Year of publication: |
1999
|
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Authors: | Tuinstra, J. |
Institutions: | Center for Nonlinear Dynamics in Economics and Finance (CeNDEF), Faculteit Economie en Bedrijfskunde |
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