Sunspot Equilibria in Systems with Memory: an Introductory Presentation

Julio Davila () and Guesnerie Roger ()

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: We consider Rational Expectations Equilibria in infinite horizon models in which equilibrium to-day depends upon the past, yesterday, and the future, to-morrow. We focus attention on a category of "Sunspot Equilibria", (à la Davila) that have a finite support and trigger a quasi-cyclic behavior of the economy. Our presentation puts emphasis on intuition and connection with earlier literature in one step forward looking models.

Keywords: ECONOMIC MODELS; EXPECTATIONS; RATIONALITY (search for similar items in EconPapers)
JEL-codes: D84 C50 (search for similar items in EconPapers)
Date: 1999
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