All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Orlando Gomes
''The timing of information updates: a stability result''
( 2009, Vol. 29 No.4 )
We assume an environment where the current value of an aggregate nonstationary variable is generated by weighting the behavior of a large set of agents who choose to form expectations resorting to more or less outdated information concerning the state of the economy. Agents using recent information are able to produce expectations with a strong component of perfect foresight; agents resorting to outdated information will use predominantly the time series of the assumed variable to learn its long-term value. The main result is that a strong degree of information stickiness may imply a departure from stability (a Neimark-Sacker bifurcation occurs).
Keywords: Information stickiness, Adaptive learning, Neimark-Sacker bifurcation, Endogenous ‡fluctuations.
JEL: D8 - Information, Knowledge, and Uncertainty: General
C6 - Mathematical Methods and Programming: General
Manuscript Received : Aug 06 2009 Manuscript Accepted : Nov 11 2009

  This abstract has been downloaded 1757 times                The Full PDF of this paper has been downloaded 154297 times