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dc.contributor.authorLasselle, Laurence
dc.contributor.authorSvizzero, Serge
dc.contributor.authorTisdell, Clem
dc.contributor.editorUniversity of St Andrews. School of Economics and Finance
dc.date.accessioned2009-04-13T16:24:13Z
dc.date.available2009-04-13T16:24:13Z
dc.date.issued2001
dc.identifier.citationSchool of Economics and Finance discussion paper series ; 0111en
dc.identifier.urihttp://ideas.repec.org/p/san/wpecon/0111.htmlen
dc.identifier.urihttp://hdl.handle.net/10023/655
dc.descriptionPreviously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000057/en
dc.description.abstractWhile Rational Expectations have dominated the paradigm of expectations formation, they have been more recently challenged on the empirical ground such as, for instance, in the dynamics of the exchange rate. This challenge has led to the introduction of heterogeneous expectations in economic modeling. More specifically, the forecasts of the market participants have been drawn from competing views. Two behaviours are usually considered: agents are either fundamentalist or chartist. Moreover, the possibility of switching from one behaviour to the other one is also assumed. In a simple cobweb model, we study the dynamics associated with different endogenous switching process based on the path of prices. We provide an example with an asymmetric endogenous switching process built on the dynamics of past prices. This example confirms the widespread belief that fundamentalist market behaviour as compared with that of chartist tends to promote market stability.en
dc.format.extent80742 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherSchool of Economics and Finance, University of St Andrews.en
dc.subjectbounded rationalityen
dc.subjectchartistsen
dc.subjectchaosen
dc.subjectfundamentalistsen
dc.subjectrational expectationsen
dc.subject.lccHen
dc.subject.lccHBen
dc.subject.lccHGen
dc.titleHeterogeneous beliefs and instabilityen
dc.typeWorking or discussion paperen
dc.description.versionPostprinten
dc.publicationstatusNot publisheden
dc.statusNon peer revieweden


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