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Out-of-Equilibrium Dynamics with Heterogeneous Capital Goods

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  • Vipin P. Veetil

    (Department of Economics, George Mason University, Mason Hall, 1st Floor, MSN 3G4, Fairfax, Virginia 22030, United States of America)

Abstract

This paper studies the problem of accumulating heterogeneous capital goods in an economy with imperfect markets populated by boundedly rational agents. It relaxes classical assumptions about information and cognition. The agents are not capable of computing an equilibrium path to steady state. Agents discover prices by interacting with each other. The economy accumulates a near-optimal mix of capital goods. The structure of interactions between agents filters their behavior in such a way that limited rationality at the micro-level does not translate to grossly inefficient outcomes at the macro-level.

Suggested Citation

  • Vipin P. Veetil, 2016. "Out-of-Equilibrium Dynamics with Heterogeneous Capital Goods," New Mathematics and Natural Computation (NMNC), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 157-173, July.
    • Handle: RePEc:wsi:nmncxx:v:12:y:2016:i:02:n:s1793005716500113
    DOI: 10.1142/S1793005716500113
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    Cited by:

    1. Veetil, Vipin P. & Wagner, Richard E., 2018. "Nominal GDP stabilization: Chasing a mirage," The Quarterly Review of Economics and Finance, Elsevier, vol. 67(C), pages 227-236.

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