Convergence of adaptive learning and expectational stability: The case of multiple rational-expectations equilibria

Research output: Journal contributionsJournal articlesResearchpeer-review

Authors

This paper analyzes the relationship between the expectational stability of rational expectations solutions and the possible convergence of adaptive learning processes. Both concepts are used as selection criteria in the case of multiple rational expectations solutions. Results obtained using recursive least squares lead to the conjecture that there exists a general one-to-one correspondence between these two selection criteria. On the
basis of a simple linear model and a stochastic gradient algorithm as an alternative learning procedure, it is demonstrated that such a conjecture would be incorrect: There are cases in which stochastic gradient learning converges to rational expectations solutions that are not expectationally stable.
Original languageEnglish
JournalMacroeconomic Dynamics
Volume4
Issue number3
Pages (from-to)263-288
Number of pages26
ISSN1365-1005
DOIs
Publication statusPublished - 01.09.2000
Externally publishedYes

    Research areas

  • Economics
  • Expectational stability, Learning, Multiple equilibria

Recently viewed

Publications

  1. Metaheuristics approach for solving personalized crew rostering problem in public bus transit
  2. Unraveling Privacy Concerns in Complex Data Ecosystems with Architectural Thinking
  3. "Introduction," communication +1
  4. The structure of emotions in learning situations
  5. Gaussian trajectories in motion control for camless engines
  6. A high-resolution approach for the spatiotemporal analysis of forest canopy space using terrestrial laser scanning data
  7. The buffering effect of selection, optimization, and compensation strategy use on the relationship between problem solving demands and occupational well-being
  8. Integration of demand forecasts in ABC-XYZ analysis
  9. Integrating business models and enterprise architecture
  10. Operationalizing Network Theory for Ecosystem Service Assessments
  11. The explanatory power of Carnegie Classification in predicting engagement indicators
  12. An automated, modular system for organic waste utilization using Hermetia illucens larvae
  13. The impact of explicit references in computer supported collaborative learning: Evidence from eye movement analyses
  14. Imaginary practices as the nexus between continuity and disruptive change
  15. Complexity of traffic scenes and EEG-measures of processing workload in car driving
  16. Utilizing learning analytics to support study success
  17. Is the market classification of risk always efficient?
  18. Global fern and lycophyte richness explained: How regional and local factors shape plot richness
  19. NNARX networks on didactic level system identification
  20. Document assignment in multi-site search engines
  21. Development and criterion validity of differentiated and elevated vocational interests in adolescence
  22. From simulation to real-world robotic mobile fulfillment systems
  23. Determinants in the online distribution of digital content
  24. Competence-Oriented Teaching
  25. Inventing a secure future
  26. Unlocking knowledge-policy action gaps in disaster-recovery-risk governance cycle