Sunspot fluctuations around a steady state: the case of multidimensional, one-step forward looking economic models

Details

Serval ID
serval:BIB_C78D4C8D7E3A
Type
Article: article from journal or magazin.
Collection
Publications
Title
Sunspot fluctuations around a steady state: the case of multidimensional, one-step forward looking economic models
Journal
Econometrica
Author(s)
Geoffard, P.-Y., Chiappori, P.-A., Guesnerie, R. 
Publication state
Published
Issued date
1992
Volume
60
Number
5
Pages
1097-1126
Abstract
The paper investigates the existence of stationary sunspot equilibria (SSE) in the vicinity of a steady state in a general, one-step forward looking economic model of dimension n. It is shown that, whenever the steady state is indeterminate, for the associated deterministic dynamics--i.e., there exists a continuum of perfect foresight paths converging to the steady state--then there exists a continuum of SSE of finite order in any neighborhood of the steady state. The proof relies upon bifurcation theory; it provides a characterization of the random processes for which SSE may appear and a description of the location of the support of the SSE close to the bifurcation. The results apply in particular to linear models.
Create date
19/11/2007 11:47
Last modification date
20/08/2019 16:42
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