Learning, Adaptive Expectations and Technology Shocks
Bibliographic Data
| ID | 9715004 |
|---|---|
| Authors | Kevin X D Huang (0000-0002-6644-2253, Vanderbilt University), Zheng Liu (0000-0003-2471-6225, Federal Reserve Bank of San Francisco and Emory University), Tao Zha (0000-0001-5764-5131, Federal Reserve Bank of Atlanta and Emory University) |
| Year | 2009 |
| Volume | 119 |
| Issue | 536 |
| Pages | 377-405 |
| Publication date | 2009-03-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2008.02238.x |
| OpenAlex | W2152895447 |
| Language | EN |
| References cited | 29 |
This study explores the macroeconomic implications of adaptive expectations in a standard growth model. We show that the self-confirming equilibrium under adaptive expectations is the same as the steady state rational expectations equilibrium for all admissible parameter values, but that dynamics around the steady state are substantially different between the two equilibria. The differences are driven mainly by the dampened wealth effect and the strengthened intertemporal substitution effect, not by escapes emphasised by Williams (2003) . Consequently, adaptive expectations can be an important source of frictions that amplify and propagate technology shocks and seem promising for generating plausible labour market dynamics. Copyright © The Author(s). Journal compilation © Royal Economic Society 2009
Atlanta · Library science · Political science · Computer Science · Economic Growth and Productivity · Economic theories and models · History · Monetary Policy and Economic Impact
| Citation velocity | historical |
|---|---|
| Highly cited | No |