Equilibrium selection, observability and backward-stable solutions

• 成果类型: Article
• 署名作者: Evans, George W.; McGough, Bruce
• 署名单位: University of Oregon; University of St Andrews
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2018.04.004
• 发表日期: 2018
• 页码: 1-10
• 关键词: expectations; learning; observability; New Keynesian

摘要

The robustness of stability under learning to observability of exogenous shocks is examined. Regardless of observability assumptions, the minimal state variable solution is robustly stable under learning provided the expectational feedback is not both positive and large, while the nonfundamental solution is never robustly stable. Overlapping generations and New Keynesian models are considered and concerns raised in Cochrane (2011, 2017) are addressed. (C) 2018 Elsevier B.V. All rights reserved.