A re-evaluation of adaptive expectations in light of global nonlinear dynamic analysis

We undertake an analysis of the dynamic behaviour of a discrete time nonlinear monetary dynamics model with adaptive expectation that is a basic mechanism in a broad class of descriptive macrodynamic models. We consider in particular a variety of ways in which the adaptive expectations mechanism may be formulated. These differ in the degree of rationality of the economic agents that inhabit the model. We study in detail the local and global properties of the maps determining the price dynamics.