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

Chatelain, Jean-Bernard; Ralf, Kirsten - 2014

This paper demonstrates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational … eigenvectors related to stable eigenvalues. A finite set of equilibria is a substitute to continuous (uncountable) sets of sunspots …

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

A sunspot paradox

Hintermaier, Thomas - 2004

parameters, and in particular those assigning values of imperfections in the economy, the economy may be driven by sunspots at … some frequencies while sunspots can have no impact at other frequencies. …

Persistent link: https://www.econbiz.de/10010293732

Economic Development in Eastern Germany: History, Expectations, and Public Policy

Steger, Thomas M.; Schäfer, Andreas - 2010

aggregate level. The model features multiple equilibria and (local and global) indeterminacy. Expectations matter for resulting …

Persistent link: https://www.econbiz.de/10010276783

History, expectations, and public policy: Economic development in Eastern Germany

Schäfer, Andreas; Steger, Thomas M. - 2010

aggregate level. The model features multiple equilibria as well as (local and global) indeterminacy. Expectations matter for …

Persistent link: https://www.econbiz.de/10010276791

Journey into the unknown? Economic consequences of factor market integration under increasing returns to scale

Schäfer, Andreas; Steger, Thomas - 2011

) indeterminacy. Hence, expectations matter for resulting equilibrium dynamics. Despite its simplicity, the model creates a rich set … fundamentals in models with indeterminacy. The model is applied to replicate two striking empirical characteristics of …

Persistent link: https://www.econbiz.de/10010280639

Financial system fragility models

Iancu, Aurel - 2011

This paper analyses two types of models: 1. Those based on assumptions of monetary and financial market equilibrium disturbance in line with mainstream thinking that there is self-regulating market, the units would have rational expectations, and the crisis would be a temporary phenomenon caused...

Persistent link: https://www.econbiz.de/10010527416

Unemployment and indeterminacy

Nakajima, Tomoyuki - 2003

Using an efficiency-wage model, we examine the relationship between indeterminacy and unemployment insurance. It is … indeterminacy. Our result is based on the fact that the no-shirking condition with marginal utility ofw ealth kept constant is …

Persistent link: https://www.econbiz.de/10010318962

News versus sunspot shocks in a New Keynesian model

Karnizova, Lilia - 2010

monetary policy and sunspots. The key distinction between the shocks lies in their relation to the realized policy shock. If … monetary policy is 'active', the sunspots are irrelevant, and the model responses to the news shocks are unique. In both cases …

Persistent link: https://www.econbiz.de/10010300024

News versus sunspot shocks in a New Keynesian model

Karnizova, Lilia - In: Economics: The Open-Access, Open-Assessment E-Journal 4 (2010) 2010-19, pp. 1-27

Persistent link: https://www.econbiz.de/10010300732

Determinacy with Capital Adjustment - Costs and Sector-Specific Externalities

Herrendorf, Berthold; Valentinyi, Akos - 2000

indeterminate and stable sunspots are possible. We find that capital adjustment costs of any size preclude stable sunspots for every … size are considered, a necessary condition for the existence of stable sunspots is an upward- sloping labor demand curve in … the standard result that when we abstract from capital adjustment costs, stable sunspots occur in the two-sector model for …

Persistent link: https://www.econbiz.de/10010494267