Determinacy and e-stability under reduced-form learning

Research output: Contribution to journalArticle

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

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Reduced form
Determinacy
Subjective expectations
Rational expectations

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

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title = "Determinacy and e-stability under reduced-form learning",
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.",
author = "Seonghoon Cho",
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Determinacy and e-stability under reduced-form learning. / Cho, Seonghoon.

In: Economics Letters, Vol. 128, 01.03.2015, p. 69-71.

Research output: Contribution to journalArticle

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