Adaptively evolving expectations in models of monetary dynamics: The fundamentalists forward looking

Adaptively evolving expectations in models of monetary dynamics: The fundamentalists forward looking

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Article ID: iaor20013969
Country: Netherlands
Volume: 89
Start Page Number: 21
End Page Number: 34
Publication Date: Jun 1999
Journal: Annals of Operations Research
Authors: ,
Abstract:

In the basic Cagan model of monetary dynamics, we allow inflationary expectations to be formed as a weighted average of fundamentalist and chartists expectations. We allow the weights to evolve adaptively according to the mechanism of Brock and Hommes and study the resulting dynamic behaviour.

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