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

Jean-Bernard Chatelain and Kirsten Ralf

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: This paper demonstates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational expectations models. The number of equilibria corresponds to the number of ways to select n eigenvectors among a larger set of eigenvectors related to stable eigenvalues. A finite set of equilibria is a substitute to continuous (uncountable) sets of sunspots equilibria, when the number of independent eigenvectors for each stable eigenvalue is equal to one

Keywords: Linear rational expectations models; indeterminacy; multiple equilibria; Riccati equation; sunspots (search for similar items in EconPapers)
JEL-codes: C60 C61 C62 E13 E61 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2014-07
New Economics Papers: this item is included in nep-mac and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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ftp://mse.univ-paris1.fr/pub/mse/CES2014/14060.pdf (application/pdf)

Related works:
Working Paper: A finite set of equilibria for the indeterminacy of linear rational expectations models (2014)
Working Paper: A finite set of equilibria for the indeterminacy of linear rational expectations models (2014)
Working Paper: A finite set of equilibria for the indeterminacy of linear rational expectations models (2014)
Working Paper: A finite set of equilibria for the indeterminacy of linear rational expectations models (2014)
Working Paper: A finite set of equilibria for the indeterminacy of linear rational expectations models (2014)
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