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Learning, Rationality, the Stability of Equilibrium and Macroeconomics

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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.

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