The purpose of this paper is to show how to solve linear dynamic rational expectations models with anticipated shocks by using the generalized Schur decomposition method. Furthermore, we determine the optimal unrestricted and restricted policy responses to anticipated shocks. We demonstrate our...

The purpose of this paper is to show how to solve linear dynamic rational expectations models with anticipated shocks by using the generalized Schur decomposition method. Furthermore, we determine the optimal unrestricted and restricted policy responses to anticipated shocks. We demonstrate our...

This paper shows that the basic unit of information aggregation described by the Geanakoplos and Polemarchakis (1982) posterior revision process does not always produce public statistics that are closer to the full information posterior than the common prior. I study this process of back and...

The paper address the topic of price stickiness, that is price elasticity below one with respect to nominal shocks. The paper original contribution is also in its approach to modelling: hard uncertainty and macroeconomics are linked within a micro-founded framework. The analysis is carried out...