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

Jean-Bernard Chatelain and Kirsten Ralf

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: This paper demonstrates 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; sunspots; indeterminacy; multiple equilibria; matrix Riccati equation (search for similar items in EconPapers)
JEL-codes: C60 C61 C62 E13 E60 (search for similar items in EconPapers)
Date: 2014-07-25
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (5)

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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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