Information, expectations and macroeconomic policy.
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The thesis is motivated by some important recent developments
in macroeconomic theory and the theory of macroeconomic policy. A
common theme emphasized throughout is the integration of rational
expectations into macroeconomic policy evaluation and the sophism
of conducting evaluations predicated on alternative expectations
hypotheses.
The application of rational expectations to optimal control
theory inspires a game-theoretic paragigm for the derivation of
optimal economic policies. This transform fundamentally the way
in which economists should address the control problem. The recent
proliferation of research in the area is subject to the first
systematic investigation. The necessity for assimilating model
uncertainty into the problem of policy evaluation is emphasized.
This is made operational with respect to a particulaxly topical
issue concerning the optimal choice of monetary instrument.
A substantial part of the thesis is devoted to a rigorous
exploration of the information structure conditioning expectations.
Particular emphasis is on partial ignorance. An intelligent system
can exploit statistical filtering techniques to extract the information
content of certain economic variables. The thesis illustrates
vividly the potentially critical dependence of the laws of motion of
the system on the information structure. it calls for a detailed
explication of that structure a3 a pre-requisite for any analysis and
highlights properties of certain earlier treatments which are
symptomatic of their neglect of this.
Analytical work is combined with computer simulations of a
larger econometric model. Higher order dynamics are the realised
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consequences of asset accumulati6n and the government budget
constraint. The issue of bond-financed deficit instability is
subject to extensive testing and the implications of divergent
e: cpectations mechanisms elicited.
Authors
Blackburn, KeithCollections
- Theses [3834]