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Aggregation over time and the inverse optimal predictor problem for adaptive expectations in continuous time


Abstract: This paper describes the continuous time stochastic process for money and inflation under which Cagan?s adaptive expectations model is optimal. It then analyzes how data formed by sampling money and prices at discrete points in time would behave.

https://doi.org/10.21034/sr.74

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1981

Number: 74