Anchoring Economic Predictions in Common Knowledge

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: The paper examines within a unified methodology expectational coordination in a series of economic models. The methodology views rational expectations equilibria as reasonable predictors whenever they can be derived from more basic Common Knowledge hypothesis. The paper successively considers a simple non noisy N-dimensional model, standard models with "intrinsic" uncertainty, reference intertemporal models with infinite horizon. It reviews existing results and suggests new ones. It translates the formal results into looser but economically intuitive statements, whose robutness, in the present state of knowledge, is tentatively ascertained.

Keywords: ECONOMIC MODELS; PREDICTION; EXPECTATIONS (search for similar items in EconPapers)
JEL-codes: D84 C50 (search for similar items in EconPapers)
Date: Written 1999
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Published in Econometrica, especilla, 2002, pp. 1-20.

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Journal Article: Anchoring Economic Predictions in Common Knowledge (2002)
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