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Publication Detailed Description
Journal Title
Economics Letters
Year (definitive publication)
2012
Language
English
Country
Switzerland
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Abstract
The notion of optimized rational behavior in the formation of expectations is used in this note to study the dynamics of a simple macroeconomic model. In a setting where departures from stability are not possible under perfect foresight, the selection of an optimal degree of rationality may lead to the generation of long-term endogenous fluctuations.
Acknowledgements
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Keywords
Expectations; Information acquisition; Inflation dynamics; Rationality; Endogenous fluctuations; Stability
Fields of Science and Technology Classification
- Economics and Business - Social Sciences
