Equilibrium and learning in a non-stationary environment

Publikation: Working/Discussion PaperWU Working Paper

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Abstract

This article considers three standard asset pricing models with adaptive agents and stochastic non-stationary dividends. We assume that the parameters are estimated by exponential smoothing, such that prices and returns remain random variables. This paper provides sufficient conditions for the ergodicity of the return process and checks whether the perceived law assumed by the bounded rational agents can be considered to be sound with the returns observed. (author's abstract)

Publikationsreihe

ReiheReport Series SFB "Adaptive Information Systems and Modelling in Economics and Management Science"
Nummer59

WU Working Paper Reihe

  • Report Series SFB \Adaptive Information Systems and Modelling in Economics and Management Science\

Zitat