A finite set of equilibria for the indeterminacy of linear rational expectations models

This paper demonstates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational expectations models. The number of equilibria corresponds to the number of ways to select n eigenvectors among a larger set of eigenvectors related to stable eigenvalues. A finite set of equilibria is a substitute to continuous (uncountable) sets of sunspots equilibria, when the number of independent eigenvectors for each stable eigenvalue is equal to one.

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Year of publication:	2014-07
Authors:	Chatelain, Jean-Bernard ; Ralf, Kirsten
Institutions:	HAL
Subject:	Linear rational expectations models \| indeterminacy \| multiple equilibria \| Riccati equation \| sunspots

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Extent:	application/pdf
Series:	Post-Print.
Type of publication:	Book / Working Paper
Notes:	View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-01053484
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011025992