Solution of RE Models with Anticipated Shocks and Optimal Policy

The purpose of this paper is to solve linear dynamic rational expectations models with anticipated shocks by using the generalized Schur decomposition method. We also determine the optimal unrestricted and restricted policy responses to temporary as well as permanent shocks which both are anticipated by the public. In particular, our method is useful for the analysis of optimal monetary policy in New Keynesian dynamic general equilibrium models.

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Year of publication:	2007
Authors:	Wohltmann, Hans-Werner ; Winkler, Roland C.
Institutions:	Institut für Volkswirtschaftslehre, Christian-Albrechts-Universität Kiel
Subject:	Anticipated Shocks \| Optimal Monetary Policy \| Rational Expectations \| Generalized Schur Decomposition

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Extent:	application/pdf
Series:	Economics Working Papers. - ISSN 2193-2476.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 2007,32
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; C32 - Time-Series Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005082891