Endogenous fluctuations in a bounded rationality economy: learning non-perfect foresight equilibria
Forward-looking economic models that assumed agents take one step ahead expectations looking back k time periods were studied. The coexistence of perfect foresight and nonperfect foresight cycles characterized the dynamics of the economy with such an expectation function. The stability of the perfect foresight cycles is related to the stability of all the periodic solutions under bounded rationality. The results showed that under bounded rationality, the dynamics of a forward-looking economic model may converge to a non-perfect foresight cycle attractor.
Publication Name: Journal of Economic Theory
Robust economic models
A study of robust economic models focuses on two problem areas. These are the use of the main analytic approach and the methods for adapting the basic techniques to the side conditions. In the study, signed directed graphs (diagraps) were evaluated as a main analytic tool in qualitative analyses. The parameters and conditions where digraphs can be used are presented. In addition, the extension of graph-theoretic methods for use in conditions are presented.
Publication Name: Journal of Economic Dynamics & Control
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