We study how the use of judgement or “add-factors” in macroeconomic forecasting may disturb the set of equilibrium outcomes when agents learn using recursive methods. We isolate conditions under which new phenomena, which we call exuberance equilibria, can exist in standard macroeconomic...

We study the properties of generalized stochastic gradient (GSG) learning in forwardlooking models. We examine how the conditions for stability of standard stochastic gradient (SG) learning both di1er from and are related to E-stability, which governs stability under least squares learning. SG...

A fundamentals based monetary policy rule, which would be optimal when private agents have perfectly rational expectations, is unstable if in fact these agents follow standard adaptive learning rules. This problem can be overcome if private expectations are observed and suitably incorporated...

We examine global economic dynamics under learning in a New Keynesian model in which the interest-rate rule is subject to the zero lower bound. Under normal monetary and fiscal policy, the intended steady state is locally but not globally stable. Large pessimistic shocks to expectations can lead...

We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations. To model this we assume that agents combine limited structural knowledge with a standard adaptive learning rule. We analyze these issues using two...

Policy for water resources impacts not only hydrological processes, but the closely intertwined economic and social processes dependent on them. Understanding these process interactions across domains is an important step in establishing effective and sustainable policy. Multidisciplinary...

This paper investigates the effect of both FS and HR slack together on firm performance and how different levels of these slack resources affect performance of private-owned enterprises (POEs) and state-owned enterprises (SOEs). Hypotheses are tested using a longitudinal data set of 11,985...