The E-Correspondence Principle
AbstractWe introduce the E-correspondence principle for stochastic dynamic expectations models as a tool for comparative dynamics analysis. The principle is applicable to equilibria that are stable under least squares and closely related learning rules. With this technique it is possible to study, without explicit solving for the equilibrium, how properties of the equilibrium are affected by changes in the structural parameters of the model. Even when qualitative comparative dynamics results are not obtainable, a quantitative version of the principle can be applied.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1112.
Date of creation: 2004
Date of revision:
comparative dynamics; rational expectations; stability of equilibrium; adaptive learning; expectational stability;
Other versions of this item:
- George W. Evans & Seppo Honkapohja, 2003. "The E-correspondence Principle," University of Oregon Economics Department Working Papers 2003-27, University of Oregon Economics Department, revised 10 Jun 2005.
- NEP-ALL-2004-05-02 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Evans, George W. & Honkapohja, Seppo, 2003.
"Existence of adaptively stable sunspot equilibria near an indeterminate steady state,"
Journal of Economic Theory,
Elsevier, vol. 111(1), pages 125-134, July.
- George W. Evans & Seppo Honkapohja, 2001. "Existence of Adaptively Stable Sunspot Equilibria Near an Indeterminate Steady State," CESifo Working Paper Series 478, CESifo Group Munich.
- George W. Evans & Seppo Honkapohja, 2002. "Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State," University of Oregon Economics Department Working Papers 2002-9, University of Oregon Economics Department, revised 06 Apr 2002.
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