The Behavior of the Exchange Rate in the Genetic Algorithm and Experimental Economies
This paper studies the behavior of the exchange rate in the Kareken-Wallace overlapping generations economy with two currencies in which decision rules are updated using the genetic algorithm. The analysis shows that a stationary monetary equilibrium of the Kareken-Wallace model is not stable under the genetic algorithm dynamics. The fluctuations in the genetic algorithm exchange rate are driven by fluctuations in the portfolio fractions, which change over time in response to the inequality between the rates of return on two currencies. Further, both the genetic algorithm simulations and the experiments with human subjects were characterized by continuing fluctuations of the exchange rate. Copyright 1996 by University of Chicago Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Anonymous, 1993. "Contents of Agricultural Economics, Vol. 9," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 9(4), December.
- Anonymous, 1993. "Economic notes," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, March.
- anonymous, 1993. "Kelley touts economy's underlying strength," Economics Update, Federal Reserve Bank of Atlanta, issue Jan, pages 1-7.
- Anonymous, 1993. "Economic forecasts overview," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, March.
- King, Robert G. & Wallace, Neil & Weber, Warren E., 1992. "Nonfundamental uncertainty and exchange rates," Journal of International Economics, Elsevier, vol. 32(1-2), pages 83-108, February.
- Ramon Marimon & Stephen E. Spear & Shyam Sunder, 1993.
"Expectationally-driven market volatility: An experimental study,"
Economics Working Papers
21, Department of Economics and Business, Universitat Pompeu Fabra.
- Marimon Ramon & Spear Stephen E. & Sunder Shyam, 1993. "Expectationally Driven Market Volatility: An Experimental Study," Journal of Economic Theory, Elsevier, vol. 61(1), pages 74-103, October.
- Marimon, R. & Spear, S. & Sunder, S., 1991. "Expectationally-Driven Market Volatility: An Experimental Study," GSIA Working Papers 1991-3, Carnegie Mellon University, Tepper School of Business.
- Ramon Marimon & Stephen E. Spear & Shyam Sunder, 1992. "Expectationally-driven market volatility: an experimental study," Discussion Paper / Institute for Empirical Macroeconomics 73, Federal Reserve Bank of Minneapolis.
- -, 1993. "International economic highlights 1992," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28937, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- -, 1993. "Economic survey of Canada, 1992," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 28939, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- -, 1993. "Evolución de la economía brasileña," Informe Estadístico – Oficina de la CEPAL en Brasilia 28091, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- Anonymous, 1993. "New Zealand economic chronology 1992," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, June.
- Meese, Richard A. & Rogoff, Kenneth, 1983. "Empirical exchange rate models of the seventies : Do they fit out of sample?," Journal of International Economics, Elsevier, vol. 14(1-2), pages 3-24, February.
- Sargent, Thomas J., 1993. "Bounded Rationality in Macroeconomics: The Arne Ryde Memorial Lectures," OUP Catalogue, Oxford University Press, number 9780198288695.
- Manuelli, Rodolfo E & Peck, James, 1990. "Exchange Rate Volatility in an Equilibrium Asset Pricing Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 559-574, August.
- Monder Ram & John Sparrow, 1993. "Minority firms, racism and economic development," Local Economy, London South Bank University, vol. 8(2), pages 117-129, August.
- Garnaut, Ross & Ma, Guonan, 1993. "Economic growth and stability in China," Journal of Asian Economics, Elsevier, vol. 4(1), pages 5-24.
- Neil Wallace, 1979. "Why markets in foreign exchange are different from other markets," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Anonymous, 1993. "Economic notes," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, June.
- Anonymous, 1993. "Contents of Agricultural Economics, Vol. 8," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 8(4), June.
- Anonymous, 1993. "Economic forecast overview and summary table," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 56, September.
When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:104:y:1996:i:3:p:510-41. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.