Learning and Expectations in Macroeconomics
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A01=George W. Evans
A01=Seppo Honkapohja
Adaptive expectations
Adaptive learning
Algorithm
Author_George W. Evans
Author_Seppo Honkapohja
Behavioral economics
Calculation
Category=KCA
Category=KCB
Cobweb model
Computational economics
Coordination failure (economics)
Cost curve
Demand curve
Differential equation
Econometric model
Economic bubble
Economic equilibrium
Economic policy
Economics
Economist
Eigenvalues and eigenvectors
Endogenous growth theory
eq_bestseller
eq_business-finance-law
eq_isMigrated=1
eq_isMigrated=2
eq_nobargain
eq_non-fiction
Equation
Equilibrium point
Estimation
Estimation theory
Estimator
Exchange rate
Financial economics
Fiscal policy
Forecast error
Forecasting
General equilibrium theory
Inflation
Inflation targeting
Initial value problem
Interest rate
Large-scale macroeconometric model
Learning effect (economics)
Learning rule
Least squares
Linear model
Local convergence
Macroeconomic model
Macroeconomics
Marginal product
Market economy
Market price
Markov chain
Markov process
Mathematical optimization
Monetary policy
Nominal interest rate
Parameter
Preference (economics)
Price level
Probability
Production function
Rational expectations
Real business-cycle theory
Recursion (computer science)
Special case
Stability theory
State variable
Stochastic approximation
Stochastic calculus
Stochastic differential equation
Stochastic process
Stochastic simulation
Supply (economics)
Supply and demand
Technical progress (economics)
Variable (mathematics)
Product details
- ISBN 9780691049212
- Weight: 765g
- Dimensions: 152 x 235mm
- Publication Date: 28 Jan 2001
- Publisher: Princeton University Press
- Publication City/Country: US
- Product Form: Hardback
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A crucial challenge for economists is figuring out how people interpret the world and form expectations that will likely influence their economic activity. Inflation, asset prices, exchange rates, investment, and consumption are just some of the economic variables that are largely explained by expectations. Here George Evans and Seppo Honkapohja bring new explanatory power to a variety of expectation formation models by focusing on the learning factor. Whereas the rational expectations paradigm offers the prevailing method to determining expectations, it assumes very theoretical knowledge on the part of economic actors. Evans and Honkapohja contribute to a growing body of research positing that households and firms learn by making forecasts using observed data, updating their forecast rules over time in response to errors. This book is the first systematic development of the new statistical learning approach. Depending on the particular economic structure, the economy may converge to a standard rational-expectations or a "rational bubble" solution, or exhibit persistent learning dynamics.
The learning approach also provides tools to assess the importance of new models with expectational indeterminacy, in which expectations are an independent cause of macroeconomic fluctuations. Moreover, learning dynamics provide a theory for the evolution of expectations and selection between alternative equilibria, with implications for business cycles, asset price volatility, and policy. This book provides an authoritative treatment of this emerging field, developing the analytical techniques in detail and using them to synthesize and extend existing research.
George W. Evans is John B. Hamacher Professor of Economics at the University of Oregon, and has held positions at the London School of Economics, Stanford University, and the University of Edinburgh. Seppo Honkapohja is Professor of Economics at the University of Helsinki, where he has currently been appointed Academy Professor. Professors Evans and Honkapohja have published extensively in economic journals, and each is best known for his respective research on expectations and learning in dynamic models. This book is the outgrowth of over fifteen years of collaboration between them.
