Coordination on Saddle-Path Solutions: the Eductive Viewpoint - Linear Multivariate Models

George Evans and Roger Guesnerie ()

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: We examine local strong rationality (LSR) in multivariate models with both forward-looking expectations and predetermined variables. Given hypothetical common knowledge restrictions that the dynamics will be close to those of a specified minimal state variable solution, we obtain eductive stability conditions for the solution to be LSR. In the saddlepoint stable case the saddle-path solution is LSR provided the model is structurally homogeneous across agents. However, the eductive stability conditions are strictly more demanding when heterogeneity is present, as can be expected in multisectoral models. Heterogeneity is thus a potentially important source of instability even in the saddlepoint stable case.

Date: 2003
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.delta.ens.fr/abstracts/wp200328.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www.delta.ens.fr:80 (No such host is known. )

Related works:
Journal Article: Coordination on saddle-path solutions: the eductive viewpoint--linear multivariate models (2005)
Working Paper: Coordination on saddle-path solutions: the eductive viewpoint--linear multivariate models (2005)
Working Paper: Coordination on Saddle-Path Solutions: The Eductive Viewpoint -- Linear Multivariate Models (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:del:abcdef:2003-28

Access Statistics for this paper

More papers in DELTA Working Papers from DELTA (Ecole normale supérieure) Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).