Learning, Rationality, the Stability of Equilibrium and Macroeconomics
The issue of how agents learn to form rational expectations has received increasing attention lately. The approach taken in many papers treats model stability as a problem in learning. In reviewing this literature, the author examines carefully the assumptions about individual behavior required for learning to form rational expectations. The meaning of rationality in a macroeconomy characterized by highly decentralized markets is also discussed.
Suggested citation: Carlson, John. “Learning, Rationality, the Stability of Equilibrium and Macroeconomics,” Federal Reserve Bank of Cleveland, Economic Review, vol. 23, no. 4, pp. 02-12, 12.01.1987.