Sunspot Fluctuations on the Growth Rates

Stephane Gauthier and Gabriel Desgranges

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: This paper analyses an example of nonstationary stochastic endogenous fluctuations. It studies the existence of Markovian sunspot equilibria on the rates of growth in a linear one step forward looking economy with one predetermined variable. It is shown that asymptotically stable stochastic fluctuations arise in the neighborhood of a steady state, even if it is determinate in the perfect foresight dynamics. This leads to a generic expectations coordination failure. This problem is illustrated by an example of output fluctuations that makes less credible the coordination on the saddle-stable path converging to the determinate steady state.

Keywords: ECONOMIC GROWTH; ECONOMIC EQUILIBRIUM (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Pages: 18 pages
Date: 1998
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:del:abcdef:98-09

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 ().