Creator

• Marimon, Ramon, 1953-
• Shyam Sunder, 1944-
• Spear, Stephen E.

Series

• Discussion paper (Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics)

Issue number

• 073

Date created

• 1992-08-01

Abstract

• We study the existence and robustness of expectationally-driven price volatility in experimental overlapping generation economies. Iin the theoretical model under study there exist “pure sunspot” equilibria which can be “learned” if agents use some adaptive learning rules. Our data show the existence of expectationally-driven cycles, but only after subjects have been exposed to a sequence of real shocks and “learned” a real cycle. In this sense, we show evidence of path-dependent price volatility.

Subject (JEL)

• E44 - Financial Markets and the Macroeconomy
• F17 - Trade: Forecasting and Simulation
• C92 - Design of Experiments: Laboratory, Group Behavior
• E32 - Business Fluctuations; Cycles
• C62 - Existence and Stability Conditions of Equilibrium

Related information

• Published in: Journal of Economic Theory (Vol. 61, No. 1, October 1993, pp. 74-103) https://doi.org/10.1006/jeth.1993.1059.

Corporate Author

• Federal Reserve Bank of Minneapolis. Institute for Empirical Macroeconomics

Publisher

• Federal Reserve Bank of Minneapolis

Resource type

• Research Paper

DOI

•  https://doi.org/10.21034/dp.73

License

• Creative Commons BY-NC Attribution-NonCommercial 4.0 International

In Collection:

• Discussion Papers

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