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Reappraising Fix-Point Formalizations of Rational Expectations Equilibria

Velupillai, K. Vela
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http://hdl.handle.net/10379/1104
 https://doi.org/10.13025/23055
Publication Date
2005
Keywords
Rational expectations equilibria, Topological fix-points, Recursion theoretic fix-points, Self-reference, Infinite regress, Economics
Type
working paper
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Citation
Velupillai, K.V., (2005) "Reappraising Fix-Point Formalizations of Rational Expectations Equilibria" (Working Paper No. 0096) Department of Economics, National University of Ireland, Galway.
Abstract
The paper begins with a brief introduction to the origins of the tradition of formalizing the determination of a rational expectations equilibrium using topological fix points. It is then suggested that fidelity to the twin economic conceptual bases of rational expectations - self-reference and infinite regress - are not encapsulated in the topological formalism. To remedy this defect, a recursion theoretic formalism for modelling rational expectations equilibria is developed.
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Publisher
National University of Ireland, Galway
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CC BY-NC-ND
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Economics (Working Papers)