CARESS Working Paper #95-04 Justifying Rational Expectations

CARESS Working Paper #95-16 CORRELATED EQUILIBRIA AND LOCAL INTERACTIONS

CARESS Working Paper #95-05 Co-operation and Timing

If players cannot perfectly synchronize their actions in co-ordination games, the e±cient equilibrium is never achieved.

CARESS Working Paper #95-01 Financial Innovation and Expectations¤: Endogenous Incompleteness and Real Indeterminacy

This paper analyzes an incomplete ...nancial markets model with pricetaking utility-maximizing ...nancial innovators and no-short sales restrictions. It is shown that, given the indeterminacy of the no arbitrage price conjecture of innovators, ...nancial markets can remain incomplete in equilibrium. As a consequence, real indeterminacy of degree at least equal to int (S/2)(S(S/2)) results, wher...

Online Publication Date: 10 March, 2012 Publisher: Asian Economic and Social Society Variations in Prices due to Anticipated and Unanticipated Money

The relation between money and price has unique relevance in price stability. Rational expectations theorists hold that both anticipated and unanticipated money supply affect price level. This paper addresses this issue and enquires if anticipated and unanticipated money supplies have any role in the variations in whole sale and consumer prices (WPI & CPI) in India over the period 1992:Q1 to 20...

The Rationality of Expectations Formation and Excess Volatility

That dropping the rational expectations assumption opens the door to many more patterns of volatility as equilibrium phenomena is not surprising. That this continues to be so even after requiring the expectations to be formed rationally is indeed surprising. In effect, requiring the agents to form expectations rationally —in the sense of being such that they maximize at any time the likelihood ...