A note on learning chaotic sunspot equilibrium

Wilfredo Maldonado | Araujo, Aloisio

Keywords: Sunspot equilibrium | learning | chaos.

In this paper we prove convergence to chaotic sunspot equilibrium through two learning rules used in the bounded rationality literature. The first one shows the convergence of the actual dynamics generated by simple adaptive learning rules to a probability distribution that is close to the stationary measure of the sunspot equilibrium; since this stationary measure is absolutely continuous it results in a robust convergence to the stochastic equilibrium. The second one is based on the E-stability criterion for testing stability of rational expectations equilibrium, we show that the conditional probability distribution defined by the sunspot equilibrium is expectational stable under a reasonable updating rule of this parameter. We also report some numerical simulations of the processes proposed.

Anexos:

• paper.zip