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dc.contributor.authorEvans, George W.
dc.contributor.authorGuesnerie, Roger
dc.contributor.authorMcGough, Bruce
dc.date.accessioned2020-05-20T23:34:06Z
dc.date.available2020-05-20T23:34:06Z
dc.date.issued2019-02
dc.identifier252588205
dc.identifier6fecd29d-df76-429b-b555-b062ce856cff
dc.identifier85067199596
dc.identifier000463189800009
dc.identifier.citationEvans , G W , Guesnerie , R & McGough , B 2019 , ' Eductive stability in real business cycle models ' , The Economic Journal , vol. 129 , no. 618 , pp. 821–852 . https://doi.org/10.1111/ecoj.12620en
dc.identifier.issn0013-0133
dc.identifier.urihttps://hdl.handle.net/10023/19975
dc.descriptionThis work has been supported by National Science Foundation Grant no. SES-1025011 and by the French National Research Agency, through the program Investissements d’Avenir, ANR-10—LABX_93-01.en
dc.description.abstractWithin the standard RBC model we examine issues of expectational coordination on the unique rational expectations equilibrium. We show the sensitivity of agents’ plans and decisions to their short-run and longrun expectations is too great to trigger eductive coordination in a world of rational agents who are endowed with knowledge of the economic structure and contemplate the possibility of small deviations from equilibrium: eductive stability never obtains. We conclude adaptive learning must play a role in real-time dynamics. Our eductive instability theorem has a counterpart under adaptive learning: even with asymptotic stability the transition dynamics can involve large departures from rational expectations.
dc.format.extent605256
dc.language.isoeng
dc.relation.ispartofThe Economic Journalen
dc.subjectLearningen
dc.subjectExpectational coordinationen
dc.subjectStabilityen
dc.subjectHB Economic Theoryen
dc.subjectT-NDASen
dc.subjectBDCen
dc.subjectR2Cen
dc.subject.lccHBen
dc.titleEductive stability in real business cycle modelsen
dc.typeJournal articleen
dc.contributor.institutionUniversity of St Andrews. School of Economics and Financeen
dc.identifier.doihttps://doi.org/10.1111/ecoj.12620
dc.description.statusPeer revieweden
dc.date.embargoedUntil2020-05-21


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