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Multiple equilibria in dynamic rational expectations models: A critical review

โœ Scribed by Robert Driskill


Book ID
116455308
Publisher
Elsevier Science
Year
2006
Tongue
English
Weight
391 KB
Volume
50
Category
Article
ISSN
0014-2921

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We provide a computationally simple method of analyzing the e ects of fundamental and sunspot shocks in linear rational expectations models when the equilibrium is indeterminate. Under indeterminacy sunspots can a ect model dynamics through endogenous forecast errors. Moreover, the e ect of fundamen