We propose a method for solving and estimating linear rational expectations models that exhibit indeterminacy and we …

persistence than standard RBC models and can exhibit indeterminacy of rational expectation paths without increasing returns in …

The Paper approaches business cycles in terms of extrinsic uncertainty related, not to dynamic indeterminacy of … static indeterminacy of free entry oligopolistic equilibria within each period. We consider an OLG economy in which firms … dynamic indeterminacy, we can weaken the condition on the degree of increasing returns, which may be arbitrarily small (with a …

return to one of the most important ideas to emerge from Keynes’ (1936) General Theory; that high involuntary unemployment … generation EBC1 models to second generation EBC2 models. I argue that EBC1 models, which display dynamic indeterminacy, are part … steady-state indeterminacy, are a more radical departure from the classical Real Business Cycle model; they represent a …

of equilibrium indeterminacy, liberalization of capital movements is likely to be accompanied by persistent fluctuations … unemployment, then free migration reduces unemployment, narrows wage differentials and expands world output. …

This paper compares two theories of involuntary unemployment: the efficiency-wage theory and the insider …-outsider theory. We indicate that one of the central problems in providing microfoundations for the existence of involuntary … unemployment is to explain why there is no underbidding, and we compare the two theories in this contex. …

A search-theoretic general equilibrium model of frictional unemployment is shown to be consistent with some of the key … regularities of unemployment over the business cycle. In the model the return to a job moves stochastically. Agents can choose … unemployment. …

model, covering a panel of EU countries, and derives the implied long-run inflation-unemployment tradeoff. Our results …