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Abstract

Expectation formation plays a principal role in economic systems. We examine and revise the standard rational expectations RE model, generally taken as the best paradigm for expectations modelling, and suggest a new method to model rational expectations. Conventional conditions that assert the stability and uniqueness of popular solution methods are shown to be insufficient. The agent-based new modelling approach suggested in this paper will be shown to lead to uniquely stable solutions.



Item Type: MPRA Paper -

Original Title: A predictive multi-agent approach to model systems with linear rational expectations-

English Title: A predictive multi-agent approach to model systems with linear rational expectations-

Language: English-

Keywords: Rational expectation, Predictive control, Economics dynamic-

Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and EstimationD - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D84 - Expectations ; SpeculationsC - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C63 - Computational Techniques ; Simulation ModelingC - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis-





Author: Mostafavi, Moeen

Source: https://mpra.ub.uni-muenchen.de/35351/







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