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STABILITY OF EQUILIBRIA UNDER GENETIC-ALGORITHM ADAPTATION: AN ANALYSIS

Published online by Cambridge University Press:  01 March 1998

Jasmina Arifovic
Jasmina Arifovic
Affiliation:
Simon Fraser University
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Abstract

The stability of stationary equilibria under genetic-algorithm adaptation is studied in an overlapping-generations economy with a unique, monetary steady-state and two-period cyclic equilibria. Agents use the genetic algorithm to update their labor-supply decisions. The results of simulations and the analysis of the dynamics show that the two-period cycle is stable and that the steady-state equilibrium is unstable under genetic-algorithm adaptation. The dynamics are driven primarily by the wealth and substitution effects that lead to the algorithm's convergence to the two-period cycle.

Keywords

StabilityGenetic Algorithms
Type
Research Article
Information
Macroeconomic Dynamics , Volume 2 , Issue 1 , March 1998 , pp. 1 - 21
Copyright
© 1998 Cambridge University Press

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