Suchergebnisse

USING THE CONCEPT OF STRUCTURE-INDUCED EQUIILIBRIUM, THIS ESSAY DEVELOPS A SIMPLE BEHAVIORAL MODEL OF ROLL CALL VOTING. THE MAIN RESULTS ARE (1) IF SOME COMMITTEES ARE PREFERENCE OUTLIERS RELATIVE TO THE LEGISLATURE AS A WHOLE, THEN ROLL CALL DATA ARE LIKELY TO BE ARTIFICIALLY UNIDIMENSIONAL. (2) THE UNIDIMENSIONAL BIAS PERSISTS EVEN AS THE DIMENSIONALITY OF THE POLICY SPACE BECOMES LARGE. (3) EVEN IF COMMITTEES ARE PREFERENCE OUTLIERS, IT MAY BE IMPOSSIBLE TO DISCOVER THIS FACT BY LOOKING ONLY AT ROLL CALL VOTES.

THIS PAPER EXTENDS THE WORK ON STRUCTURE-INDICED EQUILIBRIA BY EXPLICITLY CONSIDERING VOTERS' EXPECTATIONS. THE STANDARD ASSUMPTION OF MYOPIC EXPECTATIONS IS CONTRASTED WITH THE ALTERNATIVE ASSUMPTION OF PERFECT-FORESIGHT EXPECTATIONS.

In rational beliefs (RB) models there is an observed empirical distribution for the stochastic process of state variables. Many different weakly asymptotic mean stationary (WAMS) processes could have generated this empirical distribution, i.e. are consistent with it, and each of them are therefore called a rational belief.We provide a general framework for using RB in general equilibrium models. Individual rational beliefs are assumed correlated by means of sunspots which at the aggregate level lead to excess volatility.The application adapts the proof by Duffie et al (1994) of the existence of a stationary ergodic RE equilibrium to the case where agents hold rational beliefs.

Consider a rational expectations model that includes a relationship between variables xt and zt+1. To be useful as a guide to actual behavior, this model should specify whether xt is influenced by the expectation at t of zt+1 or, alternatively, that zt+1 is directly influenced by xt. For a broad class of multivariate linear RE models, distinct causal specifications involving both expectational and inertial influences will be uniquely associated with distinct solutions—operationally, different specifications of which variables are predetermined. With a natural continuity assumption, there is only one RE solution that is fully consistent with the model's specification.