Comment on Assenza and Berardi "Learning in a Credit Economy" (2009, JEDC)

Pei Kuang

Discussion Papers from Department of Economics, University of Birmingham

Abstract: This comment shows that the "optimality" conditions in Assenza and Berardi (2009, JEDC) "Learning in a Credit Economy" imply that agents' "optimal" choices are either suboptimal or infeasible. It presents the correct optimality conditions and discusses the effect on the E-stability condition of the REE. In addition, the different dynamics under the two sets of conditions is illustrated by considering an unexpected productivity impulse. Finally, under heterogeneous learning rules, numerical simulations illustrate that bankruptcy on the part of the borrowers arises sooner as they track the economy faster.

Keywords: Learning; Bankruptcy; Heterogeneity (search for similar items in EconPapers)
JEL-codes: D83 E44 G14 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2012-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://repec.cal.bham.ac.uk/pdf/13-06.pdf

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:bir:birmec:13-06

Access Statistics for this paper

More papers in Discussion Papers from Department of Economics, University of Birmingham Contact information at EDIRC.
Bibliographic data for series maintained by Oleksandr Talavera ().