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History, expectations, and public policy: Economic development in Eastern Germany

Schäfer, Andreas; Steger, Thomas M. - 2010

aggregate level. The model features multiple equilibria as well as (local and global) indeterminacy. Expectations matter for …

Persistent link: https://www.econbiz.de/10010276791

Heterogeneous Expectations, Indeterminacy, and Postwar US Business Cycles

Ilabaca, Francisco; Milani, Fabio - 2020

postwar US macroeconomic data can be explained as the outcome of passive monetary policy, indeterminacy, and sunspot … allowing the parameters to fall both in the determinacy and indeterminacy regions. The estimates reveal large shares of agents … results conﬁrm that macroeconomic data in the early windows are better explained by indeterminacy, while determinacy is …

Persistent link: https://www.econbiz.de/10012207989

Expectational Stability of Resonant Frequency Sunspot Equilibria

Evans, George W.; Honkapohja, Seppo - 2001

We consider the stability under adaptive learning of the complete set of solutions to the model when . In addition to the fundamentals solution, the literature describes both finite-state Markov sunspot solutions, satisfying a resonant frequency condition, and autoregressive solutions depending...

Persistent link: https://www.econbiz.de/10010315168

Existence of Adaptively Stable Sunspot Equilibria Near an Indeterminate Steady State

Evans, George W.; Honkapohja, Seppo - 2001

We examine the nonlinear model Xt = Et F(xt+1) . Markov SSEs exist near an indeterminate steady state, X = F(X), provided F´(X)> 1. We show that there exist Markov SSEs that are E-stable, and therefore locally stable under adaptive learning, if F´(X)< -1.

Persistent link: https://www.econbiz.de/10010315235

Stable Sunspot Equilibria in a Cash-in-Advance Economy

Evans, George W.; Honkapohja, Seppo; Marimon, Ramon - 2001

We develop a monetary model with flexible supply of labor, cash in advance constraints and government spending financed by seignorage. This model has two regimes. One regime is conventional with two steady states. The other regime has a unique steady state which can be determinate or...

Persistent link: https://www.econbiz.de/10010315471

Are Stationary Hyperinflation Paths Learnable?

Adam, Klaus; Evans, George W.; Honkapoja, Seppo - 2003

Earlier studies of the seigniorage inflation model have found that the high-inflation steady state is not stable under adaptive learning. We reconsider this issue and analyze the full set of solutions for the linearized model. Our main focus is on stationary hyperinflationary paths near the...

Persistent link: https://www.econbiz.de/10010315727

Journey into the unknown? Economic consequences of factor market integration under increasing returns to scale

Schäfer, Andreas; Steger, Thomas - 2011

) indeterminacy. Hence, expectations matter for resulting equilibrium dynamics. Despite its simplicity, the model creates a rich set … fundamentals in models with indeterminacy. The model is applied to replicate two striking empirical characteristics of …

Persistent link: https://www.econbiz.de/10010280639