This paper uses the technique of Lubik and Schorfheide [Lubik, T., Schorfheide, F., 2004. Testing for indeterminacy: an application to U.S. monetary policy. The American Economic Review 94 (1), 190-217] to test for indeterminacy in a New Keynesian Model. Using real-time, instead of revised data...

This paper develops a simple two-country, two-good model of international trade and borrowing that suppresses all previous sources of current account dynamics. Under rational expectations, international debt follows a random walk. Under adaptive learning, however, the model's unit root is...