Determinacy and e-stability under reduced-form learning

Research output: Contribution to journalArticlepeer-review

Abstract

Under reduced-form learning, agents are endowed with an aggregate model, and rational expectations are then replaced with subjective expectations. This paper demonstrates that the reduced-form learning approach may be arbitrary in that a particular representation of aggregate dynamics has particular e-stability properties even though the underlying model's behavior is meant to be unique.

Original languageEnglish
Pages (from-to)69-71
Number of pages3
JournalEconomics Letters
Volume128
DOIs
Publication statusPublished - 2015 Mar 1

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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