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: | Chiarella Carl, Khomin Alexander |
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.