EconPapers    
Economics at your fingertips  
 

Least squares learning and business cycles

Laurent Cellarier

Journal of Economic Behavior & Organization, 2008, vol. 68, issue 3-4, 553-564

Abstract: This paper investigates whether the neoclassical growth framework augmented with least squares estimated heuristic rules may reproduce U.S. business cycles. I consider various assumptions about the length of the information set, the influence of contemporaneous data on current forecasts, and the limit case in which learning is completed. Calibrated to the U.S. economy, this model may generate endogenous business cycles that do not exist under perfect foresight. If random productivity shocks are introduced, then the model is more volatile than under rational expectations or constant gain learning and reproduces some key U.S. business cycles stylized facts.

Keywords: Bounded; rationality; Least; squares; learning; Endogenous; business; cycles (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-2681(08)00164-9
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:68:y:2008:i:3-4:p:553-564

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-09-24
Handle: RePEc:eee:jeborg:v:68:y:2008:i:3-4:p:553-564