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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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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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Are stationary hyperinflation paths learnable?
Adam, Klaus; Evans, George W.; Honkapoja, Seppo - 2003
Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the...
Persistent link: https://www.econbiz.de/10011507885
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Intra-industry trade, involuntary unemployment and macroeconomic stability
Le Riche, Antoine; Lloyd-Braga, Teresa; Modesto, Leonor - 2021
fluctuations (associated with local indeterminacy and bifurcations) are possible with smaller externalities, whatever the relative … properties of two countries with identical technologies and preferences. We consider a two-factor overlapping generations model … increasing returns to scale in production (fixed costs and externalities). In one country there is full employment and saddle …
Persistent link: https://www.econbiz.de/10012419065
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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/10009235089
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Endogenous Income Taxes and Indeterminacy in Dynamic Models : When Diamond Meets Ramsey Again
Chen, Yan - 2013
homothetic preferences (e.g., Lloyd-Braga, Nourry and Venditti, 2007). We show that under numerical calibrations of the … parameters, local indeterminacy can occur for distortionary tax rates that are empirically plausible for the U.S. economy … the elasticity of intertemporal substitution in consumption is slightly greater than unity. These indeterminacy conditions …
Persistent link: https://www.econbiz.de/10013076141
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Global Indeterminacy in Locally Determinate RBC Models
Coury, Tarek - 2008
does not tell the full story. With externalities smaller than required for local indeterminacy, local analysis shows the …We investigate the global dynamics of RBC models with production externalities. We confirm that purely local analysis … stable deterministic cycles. Our analysis suggests that indeterminacy is more robust than previously realized, and the …
Persistent link: https://www.econbiz.de/10012726390