On the Robustness of the Analysis of Expectational Coordination: From 3 to n + 2 goods

  • Roger Guesnerie


The paper analyses the robustness of the conclusions previously obtained, showing that, in a simple three-goods model, the success of “eductive” expectational coordination is related to low supply elasticity, high demand elasticity, and high marginal propensity to consume (or high elementary Keynesian multiplier). Similar generalized factors have analogous qualitative effects, although new factors (heteroneity of beliefs) appear. Also, the positive coordination effect of the income effect, through the Keynesian multiplier action, is now less powerful.


Spectral Radius Rational Expectation Market Clearing Market Clearing Price Marginal Propensity 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Allen F., and D. Gale, “Limited Market Participation and Volatility of Asset Prices,” American Economic Review, 84, [ 1994 ], 933–955.Google Scholar
  2. 2.
    Aumann R., “Correlated Equilibrium as an Expression of Bayesian Rationality,” Econometrica, 55, (1987) 1–18.CrossRefGoogle Scholar
  3. 3.
    Barro R., H. Grossman, “A General Disequilibrium Model of Income and Employment,” American Economic Review, 61, (1971), 82–93.Google Scholar
  4. 4.
    Bernheim B.D., “Rationalizable Strategic Behavior,” Econometrica, 52, (1984), 1007–28.CrossRefGoogle Scholar
  5. 5.
    Bryant J., “The paradox of Thrift, Liquidity Preferences and Animal Spirits,” Econometrica, 55, (1987), 1231–37.CrossRefGoogle Scholar
  6. 6.
    Calvo G.A., “Comments on Rational Expectations in Macroeconomic Models,” in Individual Forecasting and Aggregate Outcomes, Frydman R. and Phelps E. eds., Cambridge University Press, (1983).Google Scholar
  7. 7.
    Cooper R., A. John, “Coordinating Coordination Failures in Keynesian Macroeconomics,” Quarterly Journal of Economics, (1989), 242–264.Google Scholar
  8. 8.
    Drèze J., “Walras-Keynes Equilibria, coordination and macroeconomics” Discussion Paper(1996).Google Scholar
  9. 9.
    De Canio S.J., “Rational Expectations and Learning from Experience,” Quarterly Journal of Economics, (1979), 93, 47–58.CrossRefGoogle Scholar
  10. 10.
    Evans G.W., “Expectational Stability and the Multiple Equilibrium Problem in Linear Rational Expectations Models,” Quarterly Journal of Economics, 100, (1985), 1217–33.CrossRefGoogle Scholar
  11. 11.
    Evans G.W., R.Guesnerie, “Rationalizability, Strong Rationality and Expectational Stability,” Games and Economic Behaviour, 5, (1993), 632–646.CrossRefGoogle Scholar
  12. 12.
    Farqharson R., Theory of Voting, New Haven: Yale University Press, (1969).Google Scholar
  13. 13.
    Ghosal S., “Eductive Stability in an Intertemporal Economy,” University of Warwick, mimeo, (1999).Google Scholar
  14. 14.
    Guesnerie R., “An Exploration of the Eductive Justifications of the Rational Expectations Hypothesis,” American Economic Review, 82, (1992), 1254–1278.Google Scholar
  15. 15.
    Guesnerie R., “Anchoring Economic Predictions in Common Knowledge,” to appear Econometrica, 2000a.Google Scholar
  16. 16.
    Guesnerie R., “ On Short run Expectational Coordination: Fixed versus flexible wages,” to appear, Quarterly Journal of Economics, 2000b.Google Scholar
  17. 17.
    Guesnerie R., T. Hens, “Expectational Coordination in Sequential Exchange Economies,” mimeo, (2000).Google Scholar
  18. 18.
    Hellwig M., “The Conceptual Structure of Macroeconomic Models: The Income Equation.” Discussion Paper 1993, Basel.Google Scholar
  19. 19.
    Horn R., C. Johnson, (1990) “Matrix Analysis,” Cambridge University Press.Google Scholar
  20. 20.
    Luce R., H. Raiffa, Games and Decisions, New York, Wiley, (1957).Google Scholar
  21. 21.
    Lucas R.E., Jr., “Asset Prices in an Exchange Economy,” Econometrica, 46, (1978), 1429–45.CrossRefGoogle Scholar
  22. 22.
    Malinvaud E., “The Theory of Unemployment Reconsidered,” Basil Blackwell, (1977).Google Scholar
  23. 23.
    Milgrom P., J. Roberts, “Rationalizability, Learning and Equilibrium in Games with Strategic Complementarities,” Econometrica, 58, (1990), 1255–1277.CrossRefGoogle Scholar
  24. 24.
    Moulin H., “Dominance Solvable Voting Schemes,” Econometrica, 47, (1979), 1337–351.CrossRefGoogle Scholar
  25. 25.
    Muth J., “Rational Expectations and the Theory of Price Movements,” Econometrica, 29, (1961), 315–35.CrossRefGoogle Scholar
  26. 26.
    Nagel R., “Unraveling in Guessing Games: An Experimental Study,” American Economic Review, 85, (1995), 1313–1326.Google Scholar
  27. 27.
    Pearce D., “Rationalizable Strategic Behavior and the Problem of Perfection,” Econometrica, 52, (1984), 1029–50.CrossRefGoogle Scholar
  28. 28.
    Tan T., S.R. Costa da Werlang, “On Aumann’s Notion of Common Knowledge, an Alternative Approach,” Journal of Economic Theory, 45, (1988), 370–91.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2001

Authors and Affiliations

  • Roger Guesnerie
    • 1
  1. 1.Delta, joint unit CNRSEHESS, ENS, and Collège de FranceParisFrance

Personalised recommendations