There has been a substantial amount of research on interest rate rules. This literature finds that the feasibility and desirability of interest rate rules depends on the structure of the model used to approximate macroeconomic reality. We employ a series of macroeconomic models to shed light on...

We present a new approach to the approximation of equilibrium solutions to nonlinear rational expectations models that applies to any order of approximation. The approach relies on a particular version of Taylor series approximations -- the differential version -- and on a scalar perturbation of...

Development of rational expectations models of the business cycle has been the central issue on the macroeconomic research agenda since the influential analyses of Robert Lucas. In this essay, we review these developments, focusing on the extent to which the rational expectations perspective has...