Working Paper Series,
Research Institute of Industrial Economics

Abstract: This paper reviews a growing literature investigating how economic agents may learn rational expectations. Fully rational learning requires implausible initial information assumptions, therefore some form of bounded rationality has come into focus. Such learning models often converge to rational expectations equilibria within certain bounds. Convergence analysis has been much simplified by methods from adaptive control theory. Learning stability as a correspondence principle show some promise in common macro models. A new selection problem arises since differences in initial information and learning methods give rise to many different equilibria, making economic modelling sensitive to assumptions on information and information processing.

Keywords: Rational learning; bounded rationality; selection problems; information

JEL-codes: D83

49 pages, December 1989

Full text files

wp238.pdf  

Download statistics

• Research Institute of Industrial Economics
• Ordering Working Papers
• Home page for this series

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().

RePEc:hhs:iuiwop:0238This page generated on 2024-09-13 22:15:47.