Evans, George W.; McGough, Bruce - In: Macroeconomic Dynamics 15 (2011) 01, pp. 80-92
By endowing his agents with simple forecasting models, or <italic>representations</italic>, M. Woodford (“Learning to Believe in Sunspots,” <italic>Econometrica</italic> 58, 277–307, 1990) found that finite state Markov sunspot equilibria may be stable under learning. We show that common factor representations generalize...
