This article addresses the stability properties of a simple economy (characterized by a one-dimensional state variable) when the representative agent, confronted by trajectories that are divergent from the steady state, performs transformations in that variable in order to improve forecasts. We...

This article studies dynamics in a model where agents forecast a one dimensional variable via ordinary least squares regressions on the lagged values of the state variable. We study the stability properties of alternative transformations of the state variable that the agent can endogenously set...

Consider a one step forward looking self-referential model with a one dimensional state variable where the information set available to agents when they make their forecast for the next period includes the current realization of an extrinsic random process but does not include the current value...

This article studies dynamics in a model where agents forecast a one dimensional state variable via ordinary least squares regressions on the lagged values of the state variable. We study the stability properties of alternative transformations of the state variable that the agent can...

We show that a perfect correlated equilibrium distribution of an N-person game, as defined by Dhillon and Mertens (1996) can be achieved using a finite number of copies of the strategy space as the message space.