Skip to main content
×
Home
    • Aa
    • Aa

INSTABILITY OF SUNSPOT EQUILIBRIA IN REAL BUSINESS CYCLE MODELS UNDER INFINITE HORIZON LEARNING

  • Yangyang Ji (a1) (a2) and Wei Xiao (a2)
Abstract

This paper examines the stability of sunspot equilibria in one-sector RBC models under infinite horizon learning. We present general conditions under which the reduced-form model can possess E-stable sunspot equilibria and apply these conditions to three prominent one-sector RBC models. We find that the rational expectations sunspot equilibria are generally unstable under learning.

Copyright
Corresponding author
Address correspondence to: Yangyang Ji, China Economics and Management Academy, Central University of Finance and Economics, No. 39, South College Road, Haidian District, 100081 Beijing, China; Department of Economics, State University of New York at Binghamton, 13902 Binghamton, NY, USA; e-mail: yji3@binghamton.edu.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Macroeconomic Dynamics
  • ISSN: 1365-1005
  • EISSN: 1469-8056
  • URL: /core/journals/macroeconomic-dynamics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords:

Metrics

Full text views

Total number of HTML views: 3
Total number of PDF views: 11 *
Loading metrics...

Abstract views

Total abstract views: 60 *
Loading metrics...

* Views captured on Cambridge Core between 29th August 2017 - 20th September 2017. This data will be updated every 24 hours.