Saddlepath learning.
Saddlepath learning occurs when agents know the form but not the coefficients of the saddlepath relationship defining rational expectations equilibrium. Under saddlepath learning, we obtain a completely general relationship between determinacy and e-stability, and generalise Minimum State Variable r...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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Elsevier
2011
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| _version_ | 1797074347308875776 |
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| author | Ellison, M Pearlman, J |
| author_facet | Ellison, M Pearlman, J |
| author_sort | Ellison, M |
| collection | OXFORD |
| description | Saddlepath learning occurs when agents know the form but not the coefficients of the saddlepath relationship defining rational expectations equilibrium. Under saddlepath learning, we obtain a completely general relationship between determinacy and e-stability, and generalise Minimum State Variable results previously derived only under full information. When the system is determinate, we show that a learning process based on the saddlepath is always e-stable. When the system is indeterminate, we find there is a unique MSV solution that is iteratively e-stable. However, in this case there is a sunspot solution that is learnable as well. We conclude by demonstrating that our results hold for any information set. |
| first_indexed | 2024-03-06T23:34:48Z |
| format | Journal article |
| id | oxford-uuid:6d4c53c2-600b-430e-8c18-a48815647915 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T23:34:48Z |
| publishDate | 2011 |
| publisher | Elsevier |
| record_format | dspace |
| spelling | oxford-uuid:6d4c53c2-600b-430e-8c18-a488156479152022-03-26T19:16:52ZSaddlepath learning.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:6d4c53c2-600b-430e-8c18-a48815647915EnglishDepartment of Economics - ePrintsElsevier2011Ellison, MPearlman, JSaddlepath learning occurs when agents know the form but not the coefficients of the saddlepath relationship defining rational expectations equilibrium. Under saddlepath learning, we obtain a completely general relationship between determinacy and e-stability, and generalise Minimum State Variable results previously derived only under full information. When the system is determinate, we show that a learning process based on the saddlepath is always e-stable. When the system is indeterminate, we find there is a unique MSV solution that is iteratively e-stable. However, in this case there is a sunspot solution that is learnable as well. We conclude by demonstrating that our results hold for any information set. |
| spellingShingle | Ellison, M Pearlman, J Saddlepath learning. |
| title | Saddlepath learning. |
| title_full | Saddlepath learning. |
| title_fullStr | Saddlepath learning. |
| title_full_unstemmed | Saddlepath learning. |
| title_short | Saddlepath learning. |
| title_sort | saddlepath learning |
| work_keys_str_mv | AT ellisonm saddlepathlearning AT pearlmanj saddlepathlearning |