"Economic Darwinism", October 2004, joint with Birgitte Sloth.
Pdf-file: ED
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"Prosperity, Equality, and Redistribution", June 2003, joint with Carl Johan Dalgaard.
Pdf-file: PER
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"The Evolution of Conventions Under Incomplete Information", November 2003, joint with Mogens Jensen and Birgitte Sloth. The paper is forthcoming in Economic Theory.
The paper shows that equilibrium selection by evolutionary methods (here by a generalization of Young (Ec. 1993)'s evolutionary learning process) in games of incomplete information, may well give "disturbing" results: The selected equilibria will often exhibit bad coordination between the different types of players, an inefficiency that is intimately linked to the precense of incomplete information.
Pdf-file: CON
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"Endogenous Keynesian Business Cycles", March 2004.
A nominal rigidity - the expected value of the nominal wage rate is predetermined in each short period, but wages adjust competitively between the periods in response to excess demands and supplies - is shown to work as a mechanism for endogenous, rational expectations business cycles. Without anything like a perversely sloped labor supply curve, extreme (low) substituitability between inputs, or very strong productive externalities, a certain, and non-extreme, degree of sluggishness in the (competitive) adjustment of the nominal wage rate will make sunspot equilibria along which expectations are correct, exist. The rate of unemployment varies countercyclically over such fluctuations and welfare concerns may well motivate a permanent policy effort to keep the economy at a steady state at which unemployment is at the natural rate all the time.
Pdf-file: Keynes.
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"Endogenous Product Diversity and Endogenous Business Cycles", August 2000.
The paper shows that monopolistic competition on the product markets through two effects naturally associated to it, namely endogenous markups and taste for variety, may contribute strongly to remedy the well-known problems in the theory of endogenous, expectations driven business cycles, that such fluctuations in most models only occur under implausible conditions and, when they occur, have unrealistic properties.
For pdf-file, click here: Diversity.
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"On the Structural Difference Between the Evolutionary Approach of Young and that of Kandori, Malaith, and Rob", September 2000, joint with Mogens Jensen and Birgitte Sloth.
Perhaps another disturbing result concerning equilibrium selection by evolutionary methods. It is well known that which equilibrium is selected may depend on the details of the trembles (error/mutation/experiments) process assumed. Here we show that it may also depend on a more fundamental, and hard to determine, aspect of the process, namely from what kind of observations people learn. We demonstrate this by showing that the two well-known processes of Young (Ec. 1993) and of Kandori, Malith, and Rob (also Ec. 1993) give opposite selection even in games very close to the simple coordination games originally studied by the authors (in which the processes were found to select identically).
For pdf-file, click here: YvsKMR.
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