Stability Of Equilibria Under Genetic-Algorithm Adaptation: An Analysis
AbstractThe stability of stationary equilibria under genetic-algorithmadaptation is studied in an overlapping-generations economy with aunique, monetary steady-state and two-period cyclic equilibria.Agents use the genetic algorithm to update their labor-supply decisions. The results of simulations and the analysis of thedynamics show that the two-period cycle is stable and that thesteady-state equilibrium is unstable under genetic-algorithmadaptation. The dynamics are driven primarily by the wealth andsubstitution effects that lead to thealgorithm s convergence to the two-period cycle.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Macroeconomic Dynamics.
Volume (Year): 2 (1998)
Issue (Month): 01 (March)
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