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Rational Expectations Equilibria, Learning, and Model Specification

✍ Scribed by M. M. Bray and N. E. Savin


Book ID
111643105
Publisher
John Wiley and Sons
Year
1986
Tongue
English
Weight
563 KB
Volume
54
Category
Article
ISSN
0012-9682

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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