This paper studies the stability of competitive equilibria in a model of aggregate employment when the representative agent uses a least-squares forecasting procedure. It is shown that the Pareto inferior low employment steady state is always unstable under least-squares learning, even if it is stable under perfect foresight. The high employment steady state is stable under learning if and only if it is saddle point stable under perfect foresight. This weakens multiple equilibrium theories of coordination failure that purport to explain persistently high unemployment. The Pareto superior high employment steady state will be the focal point of individual forecasting.

Journal Article The Pasinetti Paradox Revisited Get access B. J. Moore B. J. Moore Wesleyan University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 41, Issue 2, April 1974, Pages 297–299, https://doi.org/10.2307/2296719 Published: 01 April 1974

Journal Article Announcements Get access Charles Bean, Charles Bean Search for other works by this author on: Oxford Academic Google Scholar John Moore John Moore Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 56, Issue 4, October 1989, Page 475, https://doi.org/10.1093/restud/56.4.475 Published: 01 October 1989

W. W. Higgins, B. J. Moore, Market Structure Versus Information Costs as Determinants of Underwriters' Spreads on Municipal Bonds, The Journal of Financial and Quantitative Analysis, Vol. 15, No. 1 (Mar., 1980), pp. 85-97

William J. Moore, John Raisian, Union-Nonunion Wage Differentials in the Public Administration, Educational, and Private Sectors: 1970-1983, The Review of Economics and Statistics, Vol. 69, No. 4 (Nov., 1987), pp. 608-616

This study examines a disequilibrium model of a small, open economy with explicit links between periods due to inventory accumulation, as well as the more conventional channels through current account imbalances and the government budget constraint. The key features of the model are that agents have perfect foresight with neutral public debt and that inventories adjust to smooth production intertemporarily. The paper explores the extent to which fiscal policy can be used selectively for coping with an export slump without running into a balance of payments constraint. Copyright 1989 by The Review of Economic Studies Limited.