Nonuniqueness in Rational Expectations Models: An Interpretation

David Backus

Working Paper from Economics Department, Queen's University

Abstract: This paper reconsiders McCallum's minimal-state-variable technique for selecting a single, bubble-free solution to a rational expectations model. I argue this technique bears a strong structural similarity to the conventional stability conditions, and when these approaches fail to yield a unique bounded solution, so does McCallum's.

Pages: 11 pages
Date: 1985
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:601

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