Showing 1 - 8 of 8
In this note the method of Hamiltonian dynamics is used to characterize the time-consistent solution to the optimal control problem in a deterministic continuous time rational expectations model. A linear quadratic example based on the work of Miller and Salmon is used for simplicity. To derive...
Persistent link: https://www.econbiz.de/10012477927
The distinctiof between predetermined and non-predetermined variables is a crucial one in rational expectations models. I consider and reject two definitions, one proposed by Blanchard and Kahn and one by Chow. Both definitions lead to possible misc1assifications. Instead I propose the following...
Persistent link: https://www.econbiz.de/10012478051
The paper investigates the robustness of the proposition that in stochastic models contingent or feddback rules dominate fiped or openloop rules. Four arguments in favour of fixed rules are considere`. 1) The presence of an incompetent op malevolent policy maker. 2) A trade-off between...
Persistent link: https://www.econbiz.de/10012478303
The paper demonstrates that the concepts of dynamic controllability are useful for the theory of economic policy by …
Persistent link: https://www.econbiz.de/10012478412
The paper reviews recent developments in macroeconomic theory and their implications for econometric modelling and for …. 2) Problems of evaluating the role of money given the absence of reasonable microfoundations for monetary theory. 3) The …
Persistent link: https://www.econbiz.de/10012478436
The paper analyses a class of two-point boundary value problem for systems of linear differential equations with constant coefficients. The boundary conditions are expressed as linear restrictions on the state vector at an initial time and at a finite terminal time. This is applicable even if...
Persistent link: https://www.econbiz.de/10012478437
This paper aims to provide a stochastic, rational expectations extension of Tobin's "Money and Income; Post Hoc Ergo Proper Hoc?". It is well-known that money may Granger-cause real variables even though the joint density function of the real variables is invariant under changes in the...
Persistent link: https://www.econbiz.de/10012478485
The paper considers the implications of the rational expectations - New Classical Macroeconomics revolution for the "rules versus discretion" debate. The following issues are covered 1) The ineffectiveness of anticipated stabilization policy, 2) Non-causal models and rational expectations, 3)...
Persistent link: https://www.econbiz.de/10012478557