Econometrica: Mar 1981, Volume 49, Issue 2
The Stability of Steady States in Perfect Foresight Models
https://doi.org/0012-9682(198103)49:2<319:TSOSSI>2.0.CO;2-I
p.
319-333
John P. Laitner
This paper analyzes nonlinear growth models in which agents' expectations have a role in determining present behavior. Assuming agents have perfect foresight, we develop sufficiency conditions for the local stability of a given steady state. We then briefly discuss several examples in which stability prevails.Log In To View Full Content