We explore bifurcation phenomena in the open-economy New Keynesian model developed by Gali and Monacelli (2005). We find that the open economy framework brings about more complex dynamics, along with a wider variety of qualitative behaviors and policy responses. Introducing parameters related to...

We explore bifurcation phenomena in the open-economy New Keynesian model developed by Clarida, Gali and Gertler (2002). We find that the open economy framework can bring about more complex dynamics, along with a wider variety of qualitative behaviors and policy responses. Introducing parameters...

In this paper, I characterize point-rationalizability in large non-anonymous games with three dierent formulations of societal responses, and also propose an implicit dynamic process that is informed by Guesnerie's eductive notions. Given the introspection and 'mentalizing' that the...

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

This Paper develops a model with multiple steady states (low tax and low unemployment versus high tax and high unemployment) in which equilibrium selection is not conditioned on a sunspot variable. Instead, large temporary shocks initiate unavoidable transitions from one steady state to another....

This work seeks to analyze the stability of the exchange rate between the Irish and Sterling pounds. Towards this end, we work on a procedure, previously suggested by Haldane & Hall (1991), based on a regression with changing parameters and propose a statistical test of the null hypothesis of...

Many common statistical models can be specified as linear models with restrictions imposed on the parameters. A large amount of these models impose restrictions which do not allow for the analytical construction of the probability density function (pdf) of the parameters given the restrictions....

Rational expectations are often used as a strong argument against policy activism, as they may undermine or neutralize the policymaker’s actions. Although this sometimes happens, rational expectations do not always imply policy invariance or ineffectiveness. In fact, in certain circumstances...

Mathematical economics is compared and contrasted with mathematical engineering. Engineers use mathematics where it is practical and cost-effective, sometimes cutting corners, and leaving theorems and derivations to professional mathematicians. In contrast, papers by mathematical economists are...

In this paper we use global analysis techniques to investigate an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997)). The dynamics of our model admits a locally attracting steady...