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

This paper demonstrates 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:	2014-07-25
Authors:	Chatelain, Jean-Bernard ; Ralf, Kirsten
Publisher:	Kiel und Hamburg : ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Subject:	linear rational expectations models \| sunspots \| indeterminacy \| multiple equilibria \| matrix Riccati equation

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Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Preprint
Language:	English
Other identifiers:	866545492 [GVK] hdl:10419/99752 [Handle] RePEc:zbw:esprep:99752 [RePEc]
Classification:	C60 - Mathematical Methods and Programming. General ; C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; C62 - Existence and Stability Conditions of Equilibrium ; E13 - Neoclassical ; E60 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook. General
Source:	EconStor

Persistent link: https://www.econbiz.de/10010378075