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Estimation and inference in models with multiple behavioural equilibria

Alexander Mayer, Davide Raggi

arXiv 4 Dec 2025 · Econometrics

arXiv:2512.04541 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We develop estimation and inference methods for a stylized macroeconomic model with potentially multiple behavioural equilibria, where agents form expectations using a constant-gain learning rule. We first show geometric ergodicity of the underlying process to study in a second step (strong) consistency and asymptotic normality of the nonlinear least squares estimator for the structural parameters. We propose inference procedures for the structural parameters and uniform confidence bands for the equilibria. When equilibrium solutions are repeated, mixed convergence rates and non-standard limit distributions emerge. Monte Carlo simulations and an empirical application illustrate the finite-sample performance of our methods.

Citation extraction

73
references
169
in-text mentions
73
distinct cited
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self-citations
11,124
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Hommes, C. and M. Zhu (2014) Behavioral learning equilibria1.000155100%
2Hommes, C., K. Mavromatis, T. Özden, and M. Zha (2023) Behavioral Learning Equilibria in New Keynesian Models1.00064100%
3Evans, G. W. and S. Honkapohja (2001) Learning and Expectations in Macroeconomics1.00063100%
4Chevillon, G., M. Massmann, and S. Mavroeidis (2010) Inference in models with adaptive learning1.00055100%
5Mayer, A. and M. Massmann (2025) Least squares estimation in nonstationary nonlinear cohort panels with learning from experience self1.00053100%
6Straumann, D. and T. Mikosch (2006) Quasi-maximum-likelihood estimation in conditionally heteroscedastic time series: A stochastic recurrence equations approach0.92843100%
7Francq, C., B. M. Kandji, and J.-M. Zakoïan (2024) Inference on GARCH-MIDAS models without any small-order moment0.8434375%
8Lansing, K (2009) Time-Varying U.S0.84333100%
9Mavroeidis, S., M. Plagborg-Møller, and J. Stock (2014) Empirical Evidence of Inflation Expectations in the New Keynesian Phillips Curve0.84333100%
10Milani, F (2007) Expectations, learning and macroeconomic persistence0.84333100%

Showing the top 10 of 73 scored citations.