Stationary sunspot equilibria in an N commodity world
Abstract This article considers one-step forward looking economic systems, whose dynamics are governed by nonlinear relationships between prices today and prices tomorrow. Attention is focused on a category of rational expectations equilibria, stationary sunspot equilibria (SSE) correlated with a 2-state exogenous Markov process (2-SSE). Theorem 1 provides a sufficient existence condition only involving the characteristics of the deterministic stationary equilibrium (DSE). Theorem 2 exhibits connections between multiple deterministic equilibria and semi-trivial SSE. Theorems 3 and 4 show that 2-SSE close to the DSE have characteristics relating to those of the stable manifold of the deterministic system.