Evans, George W.

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https://hdl.handle.net/1794/3690

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Browsing Evans, George W. by Subject "Business cycles"

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    Indeterminacy and the Stability Puzzle in Non-Convex Economies
    (University of Oregon, Dept. of Economics, 2002-07-25) Evans, George W., 1949-; McGough, Bruce
    We extend common factor analysis to a multi-dimensional setting by considering a bivariate reduced form consistent with many Real Business Cycle type models. We show how to obtain new representations of sunspots and find that there are parameter regions in which these sunspots are stable under learning. However, once the parameters are restricted to coincide with those generated by certain standard models of indeterminacy, we find, under one information assumption, that no stable sunspots exist, and under another information assumption, that they exist only for a very small part of the indeterminacy region. This leads to the following puzzle: why does indeterminacy almost always imply instability in RBC-type models?
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    Learning and Macroeconomics
    (University of Oregon, Dept of Economics, 2008-07-11) Honkapohja, Seppo, 1951-; Evans, George W., 1949-
    Expectations play a central role in modern macroeconomic theories. The econometric learning approach models economic agents as forming expectations by estimating and updating forecasting models in real time. The learning approach provides a stability test for rational expectations and a selection criterion in models with multiple equilibria. In addition, learning provides new dynamics if older data is discounted, models are misspecified or agents choose between competing models. This paper describes the E-stability principle and the stochastic approximation tools used to assess equilibria under learning. Applications of learning to a number of areas are reviewed, including the design of monetary and fiscal policy, business cycles, self-fulfilling prophecies, hyperinflation, liquidity traps, and asset prices.