Abstract
In the basic Cagan model of monetary dynamics, we allow inflationary expectations tobe formed as a weighted average of fundamentalist and chartists expectations. We allow theweights to evolve adaptively according to the mechanism of Brock and Hommes [3] and study the resulting dynamic behaviour.
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Chiarella, C., Khomin, P. Adaptively evolving expectations in models of monetarydynamics‐ The fundamentalists forward looking. Annals of Operations Research 89, 21–34 (1999). https://doi.org/10.1023/A:1018975607106
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DOI: https://doi.org/10.1023/A:1018975607106