Imperfect Information, Bayesian Learning, and Capital Accumulation

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

2 Scopus Citations
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Author(s)

Detail(s)

Original languageEnglish
Pages (from-to)487-503
Journal / PublicationJournal of Economic Growth
Volume1
Issue number4
Publication statusPublished - 1996
Externally publishedYes

Abstract

This paper examines the consequences of informational imperfections for economic growth in an overlapping generations model in which agents learn the technological parameters in a Bayesian fashion. Under mild sufficient conditions, beliefs converge to the true value of the technological parameters. Nevertheless, even short-lived informational imperfections could have lasting effects, as they alter the long-run equilibrium levels of the capital stock. Therefore, learning dynamics may explain some of the observed differences in the performance of countries with otherwise similar economic characteristics.

Research Area(s)

  • Bayesian learning, Capital accumulation, Overlapping generations

Citation Format(s)

Imperfect Information, Bayesian Learning, and Capital Accumulation. / Bertocchi, Graziella; Wang, Yong.

In: Journal of Economic Growth, Vol. 1, No. 4, 1996, p. 487-503.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review