The Robbins – Monro Algorithm: an Application in Macroeconomics

Amaresh Das

International Journal of Financial Economics, 2014, vol. 2, issue 3, 122-128

Abstract: The paper is a journey into the dilemmas faced by economists attempting to justify and expand the scope of the theory in the direction of bounded rationality. The Robbins-Monro Algorithm that introduces stochastic approximation could be applied to more rational decisions making. Some of the methodological issues regarding the construction of new models on hypothesis other than that of rationality are discussed.

Keywords: Bounded rationality; the Robbins- Monro algorithm; cumulative pay-off matching (search for similar items in EconPapers)
Date: 2014
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