Global stability in spite of ''local instability'' with learning
Publication Type
Journal Article
Publication Date
3-2000
Abstract
We analyse learning dynamics in deterministic economies when agents generate their forecasts by performing least squares regressions on lagged values of the endogenous state variable. We establish conditions for the global convergence to the deterministic steady state of the dynamics under learning. Our global stability result is particularly relevant since the learning rules we consider are already known to produce locally divergent behaviour around the steady state.
Keywords
least squares learning, global stability, local instability
Discipline
Economic Theory
Research Areas
Economic Theory
Publication
Journal of Mathematical Economics
Volume
33
Issue
2
First Page
155
Last Page
165
ISSN
0304-4068
Identifier
10.1016/S0304-4068(99)00021-X
Publisher
Elsevier
Citation
CHATTERJI, Shurojit and CHATTOPADHYAY, Subir.
Global stability in spite of ''local instability'' with learning. (2000). Journal of Mathematical Economics. 33, (2), 155-165.
Available at: https://ink.library.smu.edu.sg/soe_research/1881
Additional URL
https://doi.org/10.1016/S0304-4068(99)00021-X