Time Consistency and Targeting Rules in Singular Rational Expectations Models

Richard G. Pierse () and Andrew Peter Blake ()

No 166, Computing in Economics and Finance 2005 from Society for Computational Economics

Abstract: Recent policy formulation has emphasised targeting rules. These often lead to policy problems which are singular, and need special solution techniques. We set out solutions for the control of singular linear rational expectations models with quadratic objectives. These are both time inconsistent and time consistent equilibria. We apply them to an open economy model.

Keywords: Targeting rules; Time consistency; Singular RE models (search for similar items in EconPapers)
JEL-codes: E52 C61 (search for similar items in EconPapers)
Date: 2005-11-11

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Persistent link: http://EconPapers.repec.org/RePEc:sce:scecf5:166

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