The Stability of Macroeconomic Systems with Bayesian Learners

James Bullard and Jacek Suda

Working papers from Banque de France

Abstract: We study abstract macroeconomic systems in which expectations play an important role. Consistent with the recent literature on recursive learning and expectations, we replace the agents in the economy with econometricians. Unlike the recursive learning literature, however, the econometricians in the analysis here are Bayesian learners. We are interested in the extent to which expectational stability remains the key concept in the Bayesian environment. We isolate conditions under which versions of expectational stability conditions govern the stability of these systems just as in the standard case of recursive learning. We conclude that Bayesian learning schemes, while they are more sophisticated, do not alter the essential expectational stability findings in the literature.

Keywords: Expectational stability; recursive learning; learnability of rational expectations equilibrium. (search for similar items in EconPapers)
JEL-codes: D83 D84 E00 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: The stability of macroeconomic systems with Bayesian learners (2016)
Working Paper: The stability of macroeconomic systems with Bayesian learners (2015)
Working Paper: The stability of macroeconomic systems with Bayesian learners (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:banfra:332

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