Another weakness of "determinacy" as a selection criterion for rational expectations models

Seonghoon Cho and Bennett T. McCallum

Economics Letters, 2009, vol. 104, issue 1, pages 17-19

Abstract: This paper argues against determinacy as a guide to interpret rational expectations solutions, using an example in which a determinate solution exists but differs sharply in dynamic behavior from that implied by the model considered on a sector-by-sector basis.

Keywords: Determinacy; Stability; Rational; expectations (search for similar items in EconPapers)
Date: 2009
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