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Out-of-Equilibrium Dynamics with Heterogeneous Capital Goods
Published in World Scientific Publishing Co. Pte Ltd
2016
Volume: 12
   
Issue: 2
Pages: 157 - 173
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. © 2016 World Scientific Publishing Company.
About the journal
JournalNew Mathematics and Natural Computation
PublisherWorld Scientific Publishing Co. Pte Ltd
ISSN17930057
Open AccessNo