Comment on Assenza and Berardi "Learning in a Credit Economy" (2009, JEDC)
This comment shows that the "optimality" conditions in Assenza and Berardi (2009, JEDC) "Learning in a Credit Economy" imply that agents' "optimal" choices are either suboptimal or infeasible. It presents the correct optimality conditions and discusses the effect on the E-stability condition of the REE. In addition, the different dynamics under the two sets of conditions is illustrated by considering an unexpected productivity impulse. Finally, under heterogeneous learning rules, numerical simulations illustrate that bankruptcy on the part of the borrowers arises sooner as they track the economy faster.
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- John Moore & Nobuhiro Kiyotaki, .
1995-5, Edinburgh School of Economics, University of Edinburgh.
- Pei Kuang, 2013.
"Imperfect Knowledge about Asset Prices and Credit Cycles,"
CDMA Working Paper Series
201303, Centre for Dynamic Macroeconomic Analysis.
- Pei Kuang, 2013. "Imperfect Knowledge about Asset Prices and Credit Cycles," Discussion Papers 13-02, Department of Economics, University of Birmingham.
- Assenza, Tiziana & Berardi, Michele, 2009.
"Learning in a credit economy,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 33(5), pages 1159-1169, May.
- Tiziana Assenzay & Michele Berardi, 2008. "Learning in a Credit Economy," Centre for Growth and Business Cycle Research Discussion Paper Series 100, Economics, The Univeristy of Manchester.
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