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The timing of information updates: a stability result

Author

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  • Orlando Gomes

    (ISCAL-IPL; ERC/UNIDE/ISCTE)

Abstract

We assume an environment where the current value of an aggregate nonstationary variable is generated by weighting the behavior of a large set of agents who choose to form expectations resorting to more or less outdated information concerning the state of the economy. Agents using recent information are able to produce expectations with a strong component of perfect foresight; agents resorting to outdated information will use predominantly the time series of the assumed variable to learn its long-term value. The main result is that a strong degree of information stickiness may imply a departure from stability (a Neimark-Sacker bifurcation occurs).

Suggested Citation

  • Orlando Gomes, 2009. "The timing of information updates: a stability result," Economics Bulletin, AccessEcon, vol. 29(4), pages 2860-2869.
    • Handle: RePEc:ebl:ecbull:eb-09-00463
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Information stickiness; Adaptive learning; Neimark-Sacker bifurcation; Endogenous fluctuations.;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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