Learning and Expectations in MacroeconomicsA 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. |
Contents
Expectations and the Learning Approach | 5 |
Introduction to the Techniques | 25 |
Variations on a Theme | 45 |
Applications | 59 |
The Mathematical Background | 87 |
Stochastic Approximation | 121 |
Further Topics in Stochastic Approximation | 147 |
Univariate Linear Models | 173 |
Multivariate Linear Models | 227 |
Steady States | 267 |
Cycles and Sunspot Equilibria | 287 |
Misspecification and Learning | 317 |
Persistent Learning Dynamics | 331 |
Extensions and Other Approaches | 361 |
Conclusions | 385 |
Author Index | 407 |
Other editions - View all
Learning and Expectations in Macroeconomics George W. Evans,Seppo Honkapohja No preview available - 2001 |
Learning and Expectations in Macroeconomics George W. Evans,Seppo Honkapohja No preview available - 2001 |