{"title":"Social learning and expectational stability","authors":"George Evans , Bruce McGough","doi":"10.1016/j.jedc.2024.104990","DOIUrl":null,"url":null,"abstract":"<div><div>Stability features of social learning (SL) dynamics are examined. We show SL can be formulated as a stochastic recursive algorithm, making it possible to analyze asymptotics using the familiar differential-equation approach. For a simple univariate model, this approach reduces to the E-stability principle, though in prominent instability cases divergence is <em>exceedingly</em> slow compared to adaptive learning (AL). We locate differing fitness criteria as the source of the slower evolution rates of SL compared to AL. Modified AL and SL learning dynamics models are developed and used to illustrate the different implications of policy change in a standard New Keynesian model. We anticipate that the central question going forward will be how best to combine the two approaches when modeling adaptation to structural change.</div></div>","PeriodicalId":48314,"journal":{"name":"Journal of Economic Dynamics & Control","volume":"172 ","pages":"Article 104990"},"PeriodicalIF":1.9000,"publicationDate":"2024-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economic Dynamics & Control","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0165188924001829","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Stability features of social learning (SL) dynamics are examined. We show SL can be formulated as a stochastic recursive algorithm, making it possible to analyze asymptotics using the familiar differential-equation approach. For a simple univariate model, this approach reduces to the E-stability principle, though in prominent instability cases divergence is exceedingly slow compared to adaptive learning (AL). We locate differing fitness criteria as the source of the slower evolution rates of SL compared to AL. Modified AL and SL learning dynamics models are developed and used to illustrate the different implications of policy change in a standard New Keynesian model. We anticipate that the central question going forward will be how best to combine the two approaches when modeling adaptation to structural change.
期刊介绍:
The journal provides an outlet for publication of research concerning all theoretical and empirical aspects of economic dynamics and control as well as the development and use of computational methods in economics and finance. Contributions regarding computational methods may include, but are not restricted to, artificial intelligence, databases, decision support systems, genetic algorithms, modelling languages, neural networks, numerical algorithms for optimization, control and equilibria, parallel computing and qualitative reasoning.