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Expectational stability of sunspot equilibria in non-convex economies
McGough, Bruce; Meng, Qinglai; Xue, Jianpo - In: Journal of economic dynamics & control 37 (2013) 6, pp. 1126-1141
Persistent link: https://www.econbiz.de/10009740450
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Existence of adaptively stable sunspot equilibria near an indeterminate steady state
Evans, George W.; Honkapohja, Seppo - 2001
We examine the nonlinear model Xt = Et F(xt+1) . Markov SSEs exist near an indeterminate steady state, X = F(X), provided F´(X)> 1. We show that there exist Markov SSEs that are E-stable, and therefore locally stable under adaptive learning, if F´(X)< -1.
Persistent link: https://www.econbiz.de/10011398793
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Expectational stability of resonant frequency sunspot equilibria
Evans, George W.; Honkapohja, Seppo - 2001
We consider the stability under adaptive learning of the complete set of solutions to the model when . In addition to the fundamentals solution, the literature describes both finite-state Markov sunspot solutions, satisfying a resonant frequency condition, and autoregressive solutions depending...
Persistent link: https://www.econbiz.de/10011398912
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Stable sunspot equilibria in a cash-in-advance economy
Evans, George W.; Honkapohja, Seppo; Marimon, Ramon - 2001
We develop a monetary model with flexible supply of labor, cash in advance constraints and government spending financed by seignorage. This model has two regimes. One regime is conventional with two steady states. The other regime has a unique steady state which can be determinate or...
Persistent link: https://www.econbiz.de/10011408407
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Stable sunspot equilibria in a cash-in-advance economy
Evans, George W.; Honkapohja, Seppo; Marimon, Ramon - Department of Economics and Business, Universitat … - 2004
We analyze a monetary model with flexible labor supply, cash-inadvance constraints and seigniorage-financed government deficits. If the intertemporal elasticity of substitution of labor is greater than one, there are two steady states, one determinate and the other indeterminate. If the...
Persistent link: https://www.econbiz.de/10005827487
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Chapter 7 Learning dynamics
Evans, George W.; Honkapohja, Seppo - In: Handbook of macroeconomics : volume 1, part A, (pp. 449-542). 1999
This chapter provides a survey of the recent work on learning in the context of macroeconomics. Learning has several roles. First, it provides a boundedly rational model of how rational expectations can be achieved. Secondly, learning acts as a selection device in models with multiple REE...
Persistent link: https://www.econbiz.de/10014024243
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Learning About Inflation Measures for Interest Rate Rules
Airaudo, Marco; Zanna, Luis-Felipe - Collegio Carlo Alberto, Università degli Studi di Torino - 2010
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules...
Persistent link: https://www.econbiz.de/10008799719
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Market distortions and local indeterminacy: A general approach
Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - 2011
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …
Persistent link: https://www.econbiz.de/10010278392
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Indeterminacy under input-specific externalities and implications for fiscal policy.
Seegmuller, Thomas - Maison des Sciences Économiques, Université Paris 1 … - 2006
In this paper, we introduce input-specific externalities in a dynamic general equilibrium model with heterogeneous … low degrees of capital-labor substitution, we show that indeterminacy requires not only a lower bound for the elasticity … condition for indeterminacy and larger increasing returns promote sadlle-path stability when inputs are high substitutes. Using …
Persistent link: https://www.econbiz.de/10005220174
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Market Distortions and Local Indeterminacy: A General Approach
Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - Institute for the Study of Labor (IZA) - 2011
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …
Persistent link: https://www.econbiz.de/10008922965