Learning the optimal buffer-stock consumption rule of CarrollReport as inadecuate




Learning the optimal buffer-stock consumption rule of Carroll - Download this document for free, or read online. Document in PDF available to download.

1 GREQAM - Groupement de Recherche en Économie Quantitative d-Aix-Marseille 2 GREThA - Groupe de Recherche en Economie Théorique et Appliquée

Abstract : This article questions the rather pessimistic conclusions of Allen et Carroll 2001 about the ability of consumer to learn the optimal buffer-stock based consumption rule. To this aim, we develop an agent based model where alternative learning schemes can be compared in terms of the consumption behaviour that they yield. We show that neither purely adaptive learning, nor social learning based on imitation can ensure satisfactory consumption behaviours. By contrast, if the agents can form adaptive expectations, based on an evolving individual mental model, their behaviour becomes much more interesting in terms of its regularity, and its ability to improve performance which is as a clear manifestation of learning. Our results indicate that assumptions on bounded rationality, and on adaptive expectations are perfectly compatible with sound and realistic economic behaviour, which, in some cases, can even converge to the optimal solution. This framework may therefore be used to develop macroeconomic models with adaptive dynamics.

Keywords : Consumption decisions Learning Expectations Adaptive behaviour Computational economics





Author: Murat Yildizoglu - Marc-Alexandre Sénégas - Isabelle Salle - Martin Zumpe -

Source: https://hal.archives-ouvertes.fr/



DOWNLOAD PDF




Related documents