Stability of cycles and expectations (Q1111912)
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scientific article
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Configure| Language | Label | Description | Also known as |
|---|---|---|---|
| English | Stability of cycles and expectations |
scientific article |
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| American English | No label defined |
No description defined |
Statements
The actual dynamics of an economy depends on how agents forecast the future at every date as a function of their information on the past, while possibly learning the structure of their environment. We show in the case of a one-dimensional state variable that under mild conditions on expectations functions, a given cycle with perfect foresight that is stable in the actual dynamics is stable in a fictitious backward perfect foresight dynamics. We exhibit a restricted class of expectations functions for which the converse is true.
