The expectational stability of underemployment equilibria.

The writer demonstrates the use of a learning algorithm in eliminating the problem of indeterminacy of perfect-foresight models that include external economies of scale. Steady states that are unambiguously socially inferior are ruled out. Although stable low-employment steady states may exist, th...

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Detalles Bibliográficos
Publicado en:Economic Inquiry Vol. 33; pp. 319 - 336
Autor principal: Moore, Bartholomew J.
Formato: Artículo
Publicado: Wiley-Blackwell April 1995
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Acceso en línea:Ver este registro en EBSCOhost
Descripción
Sumario:The writer demonstrates the use of a learning algorithm in eliminating the problem of indeterminacy of perfect-foresight models that include external economies of scale. Steady states that are unambiguously socially inferior are ruled out. Although stable low-employment steady states may exist, they are not unambiguously inferior due to the presence of both positive and negative externalities.