EconPapers    
Economics at your fingertips  
 

Learning, Adaptive Expectations and Technology Shocks

Kevin Huang (), Zheng Liu and Tao Zha

Economic Journal, 2009, vol. 119, issue 536, 377-405

Abstract: This study explores the macroeconomic implications of adaptive expectations in a standard growth model. We show that the self‐confirming equilibrium under adaptive expectations is the same as the steady state rational expectations equilibrium for all admissible parameter values, but that dynamics around the steady state are substantially different between the two equilibria. The differences are driven mainly by the dampened wealth effect and the strengthened intertemporal substitution effect, not by escapes emphasised by Williams (2003). Consequently, adaptive expectations can be an important source of frictions that amplify and propagate technology shocks and seem promising for generating plausible labour market dynamics.

Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
https://doi.org/10.1111/j.1468-0297.2008.02238.x

Related works:
Journal Article: Learning, Adaptive Expectations and Technology Shocks (2009)
Working Paper: Learning, adaptive expectations, and technology shocks (2008) Downloads
Working Paper: Learning, adaptive expectations, and technology shocks (2008) Downloads
Working Paper: Learning, Adaptive Expectations, and Technology Shocks (2008) Downloads
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:wly:econjl:v:119:y:2009:i:536:p:377-405

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1468-0297

Access Statistics for this article

Economic Journal is currently edited by Estelle Cantillon, Martin Cripps, Andrea Galeotti, Morten Ravn, Kjell G. Salvanes, Frederic Vermeulen, Hans-Joachim Voth and Rachel Kranton

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2024-06-08
Handle: RePEc:wly:econjl:v:119:y:2009:i:536:p:377-405