How to Get the Blanchard-Kahn Form from a General Linear Rational Expectations Model

In this paper we prove that every linear model with rational expectations can be transformed by means of an one-to-one mapping into another model which has one of the following properties: i) it is degenerated, ii) it is backward, iii) it has a Blanchard-Kahn form. In addition to some simple illustrations, we provide two applications on two nonlinear forward-looking economic models in order to show how to use our theoretical analysis for local stability assessement.

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Authors:	Boucekkine, Raouf ; Van, Cuong Le ; Schubert, Katheline
Institutions:	Society for Computational Economics - SCE
Subject:	Expectations \| Blanchard-Kahn form \| reduction algorithms

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Extent:	application/postscript
Series:	Computing in Economics and Finance 1996.
Type of publication:	Book / Working Paper
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005537519