Robust predictions in dynamic policy games

Juan Passadore, Juan Pablo Xandri*

*Autor correspondiente de este trabajo

Producción científica: Contribución a una revistaArtículorevisión exhaustiva

1 Cita (Scopus)

Resumen

Dynamic policy games feature a wide range of equilibria. This paper provides a methodology for obtaining robust predictions. We focus on a model of sovereign debt, although our methodology applies to other settings, such as models of monetary policy or capital taxation. Our main result is a characterization of distributions over outcomes that are consistent with a subgame perfect equilibrium conditional on the observed history. We illustrate our main result by computing—conditional on an observed history—bounds across all equilibria on the maximum probability of a crisis: means, variances, and covariances over debt prices.

Idioma originalInglés
Páginas (desde-hasta)1659-1700
Número de páginas42
PublicaciónTheoretical Economics
Volumen19
N.º4
DOI
EstadoPublicada - nov. 2024

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