In the context of the classical stochastic growth model, we provide a simple proof that the optimal capital sequence is strictly bounded away from zero whenever the initi[...]

Suppose that the dynamics of the macroeconomy were given by (partly) random fluctuations between two equilibria: "good" and "bad." One would interpret currency crises (or[...]

We set up a laboratory experiment to empirically investigate equilibrium selection in a complex economic environment. We use the overlapping-generation model of Grandmont[...]

This paper develops a unified analysis of the impacts of production delays on aggregate price fluctuations in a continuous-time cobweb-type model. We find that the time i[...]

We study the possibility of (almost) self-fulfilling waves of optimism and pessimism and self-fulfilling liquidity traps in a New Keynesian model with a continuum of hete[...]

Policy implications are derived for an inflation-targeting central bank, whose credibility is endogenous and depends on its past ability to achieve its targets. This is d[...]

Suppose that the dynamics of the macroeconomy were given by (partly) random fluctuations between two equilibria: "good" and "bad." One would interpret currency crises (or[...]