Browsing Evans, George W. by Title
Now showing items 423 of 43

Anticipated Fiscal Policy and Adaptive Learning
(University of Oregon, Dept of Economics, 20070218)We consider the impact of anticipated policy changes when agents form expectations using adaptive learning rather than rational expectations. To model this we assume that agents combine limited structural knowledge with ... 
Are Stationary Hyperinflation Paths Learnable?
(University of Oregon, Dept of Economics, 20030317)Earlier studies of the seigniorage inflation model have found that the highinflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized ... 
Asset Return Dynamics and Learning
(University of Oregon, Dept of Economics, 20061113)This paper advocates a theory of expectation formation that incorporates many of the central motivations of behavioral finance theory while retaining much of the discipline of the rational expectations approach. We provide ... 
Can Perpetual Learning Explain the Forward Premium Puzzle?
(University of Oregon, Dept of Economics, 20060828)Under rational expectations and risk neutrality the linear projection of exchange rate change on the forward premium has a unit coefficient. However, empirical estimates of this coefficient are significantly less than ... 
Comment on "Imperfect Knowledge, Inflation Expectations and Monetary Policy" by Athanasios Orphanides and John C. Williams
(University of Oregon, Dept. of Economics, 20030331)Summarizes the OrphanidesWilliams argument, locates the paper within the rapidly growing literature on learning and monetary policy, and offers specific comments on natural extensions or alternative approaches. 
Coordination on saddle path solutions: the eductive viewpoint
(University of Oregon, Dept. of Economics, 20010515)We investigate local strong rationality (LSR) in a one step forward looking univariate model with memory one. Eductive arguments are used to determine when common knowledge (CK) that the solution is near some perfect ... 
Coordination on SaddlePath Solutions: The Eductive Viewpoint  Linear Multivariate Models
(University of Oregon, Dept of Economics, 20031010)We examine local strong rationality (LSR) in multivariate models with both forwardlooking expectations and predetermined variables. Given hypothetical common knowledge restrictions that the dynamics will be close to those ... 
Does Ricardian Equivalence Hold When Expectations are not Rational?
(University of Oregon, Dept of Economics, 20100804)This paper considers the Ricardian Equivalence proposition when expectations are not rational and are instead formed using adaptive learning rules. We show that Ricardian Equivalence continues to hold provided suitable ... 
The ECorrespondence Principle
(University of Oregon, Dept of Economics, 20030623)We introduce the Ecorrespondence 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 ... 
Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State
(University of Oregon, Dept. of Economics, 20020406)We examine the nonlinear model x_t = E_t F(x_(t+1)). Markov SSEs exist near an indeterminate steady state, hat(x)=F(hat(x)), provided F'(hat(x) > 1. Despite the importance of indeterminancy in macroeconomics, earlier ... 
Expectational Stability of Stationary Sunspot Equilibria in a Forwardlooking Linear Model
(University of Oregon, Dept. of Economics, 20020114)We consider the stability under adaptive learning of the complete set of solutions to the model x_i=beta(Ei*)(x_i+1) when beat >1. In addition to the fundamentals solution, the literature describes both finitestate ... 
Expectations and the Stability Problem for Optimal Monetary Policies
(University of Oregon, Dept. of Economics, 20010803)A fundamentals based monetary policy rule, which would be the optimal monetary policy without commitment when private agents have perfectly rational expectations, is unstable if in fact these agents follow standard adaptive ... 
Expectations, Deflation Traps and Macroeconomic Policy
(University of Oregon, Dept of Economics, 20090706)We examine global economic dynamics under infinitehorizon learning in a New Keynesian model in which the interestrate rule is subject to the zero lower bound. As in Evans, Guse and Honkapohja (2008), we find that under ... 
Friedman's Money Supply Rule versus Optimal Interest Rate Policy
(University of Oregon, Dept of Economics, 20030712)Using New Keynesian models, we compare Friedman's kpercent money supply rule to optimal interest rate setting, with respect to determinacy, stability under learning and optimality. First we review the recent literature: ... 
Generalized Stochastic Gradient Learning
(University of Oregon, Dept of Economics, 20050919)We study the properties of generalized stochastic gradient (GSG) learning in forwardlooking models. We examine how the conditions for stability of standard stochastic gradient (SG) learning both differ from and are related ... 
Implementing Optimal Monetary Policy in NewKeynesian Models with Inertia
(University of Oregon, Dept of Economics, 20060603)We consider optimal monetary policy in New Keynesian models with inertia. First order conditions, which we call the MJBalternative, are found to improve upon the timeless perspective. The MJBalternative is shown to be ... 
Indeterminacy and the Stability Puzzle in NonConvex Economies
(University of Oregon, Dept. of Economics, 20020725)We extend common factor analysis to a multidimensional setting by considering a bivariate reduced form consistent with many Real Business Cycle type models. We show how to obtain new representations of sunspots and find ... 
An Interview with Thomas J. Sargent
(University of Oregon, Dept of Economics, 20050111)This is the text of an interview with Thomas J. Sargent. The interview will be published in Macroeconomic Dynamics. 
Intrinsic Heterogeneity in Expectation Formation
(University of Oregon, Dept. of Economics, 20030516)We introduce the concept of a Misspecification Equilibrium to dynamic macroeconomics. Agents choose between a list of misspecified econometric models and base their selection on relative forecast performance. A Misspecification ... 
Learning about Risk and Return: A Simple Model of Bubbles and Crashes
(University of Oregon, Dept of Economics, 20080131)This paper demonstrates that an asset pricing model with leastsquares learning can lead to bubbles and crashes as endogenous responses to the fundamentals driving asset prices. When agents are riskaverse they generate ...