Cyclical or chaotic competitive equilibria that do not exist under perfect foresight are shown to occur in a decentralized growth model under constant gain adaptive learning. This paper considers an economy populated by boundedly rational households making one-period ahead constant gain adaptive...

Bounded rationality is introduced into a standard growth model by assuming that households form one-period ahead least squares forecasts on production factor prices, and expect that future level of consumption and physical capital will be consistent with the balanced growth path. Under those...

This paper investigates the influence of clean-up subsidies on the dynamics of models of production-environment interaction in continuous time. We show that complex dynamics can arise in the cases of socially optimal and decentralised solutions. Thus, it is possible that pollution can increase...