Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices.
We study adaptive learning in a monetary overlapping generations model with sticky prices and monopolistic competition for the case where learning agents observe current endogenous variables. Observability of current variables is essential for informational consistency of the learning setup with the...
| Publicado en: | Review of Economic Studies Vol. 70; no. 4; pp. 887 - 908 |
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| Formato: | Artículo |
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Oxford University Press / UK
October 2003
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=513150001&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 513150001 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: October 2003 vid: 70 iid: 4 pid: 622 pub: Oxford University Press / UK artinfo: ui: 513150001 10.1111/1467-937X.00271 ppf: 887 ppct: 21 formats: tig: atl: Learning and Equilibrium Selection in a Monetary Overlapping Generations Model with Sticky Prices. aug: au: Adam, Klaus su: Prices -- Mathematical models Mathematical models of monetary policy Economic equilibrium Overlapping generations model (Economics) sug: subj: Prices -- Mathematical models Mathematical models of monetary policy Economic equilibrium Overlapping generations model (Economics) ab: We study adaptive learning in a monetary overlapping generations model with sticky prices and monopolistic competition for the case where learning agents observe current endogenous variables. Observability of current variables is essential for informational consistency of the learning setup with the model setup but generates multiple temporary equilibria when prices are flexible and prevents a straightforward construction of the learning dynamics. Sticky prices overcome this problem by avoiding simultaneity between prices and price expectations. Adaptive learning then robustly selects the determinate (monetary) steady state independent from the degree of imperfect competition. The indeterminate (non-monetary) steady state and non-stationary equilibria are never stable. Stability in a deterministic version of the model may differ because perfect foresight equilibria can be the limit of restricted perceptions equilibria of the stochastic economy with vanishing noise and thereby inherit different stability properties. This discontinuity at the zero variance of shocks suggests one should analyse learning in stochastic models. Reprinted by permission of the publisher. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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