Abstract

http://ssrn.com/abstract=315564
 
 

Citations



 


 



Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State


George W. Evans


University of Oregon - Department of Economics; University of Saint Andrews - School of Economics and Finance

Seppo Honkapohja


Bank of Finland; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)


Journal of Economic Theory, Forthcoming

Abstract:     
We examine the nonlinear model x(t)=E(t)F(x(t+1)). Markov SSEs (stationary sunspot equilibria) exist near an indeterminate steady state, x=F(x), provided |F'(x)| >1. Despite the importance of indeterminacy in macroeconomics, earlier results have not provided conditions for the existence of adaptively stable SSEs near an indeterminate steady state. We show that there exist Markov SSEs near x that are E-stable, and therefore locally stable under adaptive learning, if F'(x)<-1.

Keywords: Indeterminacy, Learnability, Expectational Stability, Endogenous Fluctuations

JEL Classification: C62, D83, D84, E31, E32

Accepted Paper Series


Not Available For Download

Date posted: July 23, 2002  

Suggested Citation

Evans, George W. and Honkapohja, Seppo, Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State. Journal of Economic Theory, Forthcoming. Available at SSRN: http://ssrn.com/abstract=315564

Contact Information

George W. Evans (Contact Author)
University of Oregon - Department of Economics ( email )
1285 University of Oregon
Eugene, OR 97403
United States
541-346-4662 (Phone)
541-346-1243 (Fax)
University of Saint Andrews - School of Economics and Finance ( email )
The Scores, Castlecliff
St. Andrews, Fife KY16 8RD
United Kingdom
44-1334-462435 (Phone)
HOME PAGE: http://www.st-andrews.ac.uk/economics/staff/pages.g.evans.shtml
Seppo Honkapohja
Bank of Finland ( email )
P.O. Box 160
FIN-00101 Helsinki
Finland
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
Feedback to SSRN


Paper statistics
Abstract Views: 423

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.297 seconds