The E-Correspondence Principle

George Evans and Seppo Honkapohja

No 1112, CESifo Working Paper Series from CESifo

Abstract: We introduce the E-correspondence principle for stochastic dynamic expectations models as a tool for comparative dynamics analysis. The principle is applicable to equilibria that are stable under least squares and closely related learning rules. With this technique it is possible to study, without explicit solving for the equilibrium, how properties of the equilibrium are affected by changes in the structural parameters of the model. Even when qualitative comparative dynamics results are not obtainable, a quantitative version of the principle can be applied.

Keywords: comparative dynamics; rational expectations; stability of equilibrium; adaptive learning; expectational stability (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp1112.pdf (application/pdf)

Related works:
Journal Article: The E‐Correspondence Principle (2007)
Working Paper: The E-correspondence Principle (2005)
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:ces:ceswps:_1112

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().