A Sunspot Paradox

Thomas Hintermaier ()

No 150, Economics Series from Institute for Advanced Studies

Abstract: Calibrated models of the business cycle typically assume a certain frequency at which economic agents take decisions. In this paper I show that the local stability properties of dynamic stochastic general equilibrium macro models may depend on the length of a period in the model economy. This leads to the following paradoxical situation: For given 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.

Keywords: Sunspots; Indeterminacy; High frequency; Temporal aggregation (search for similar items in EconPapers)
JEL-codes: C60 E30 (search for similar items in EconPapers)
Date: 2004-03
View list of references View citations in EconPapers

Downloads: (external link)
http://www.ihs.ac.at/publications/eco/es-150.pdf First version, 2004 (application/pdf)

Related works:
Journal Article: A sunspot paradox (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ihs:ihsesp:150

Ordering information: This working paper can be ordered from
Institute for Advanced Studies - Library, Stumpergasse 56, A-1060 Vienna, Austria

Access Statistics for this paper

More papers in Economics Series from Institute for Advanced Studies
Address: Stumpergasse 56, A-1060 Vienna, Austria
Contact information at EDIRC.
Series data maintained by Wolfgang Nessler ().