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Stable sunspot equilibria in a cash-in-advance economy
Evans, George W.; Honkapohja, Seppo; Marimon, Ramon - Department of Economics and Business, Universitat … - 2004
We analyze a monetary model with flexible labor supply, cash-inadvance constraints and seigniorage-financed government deficits. If the intertemporal elasticity of substitution of labor is greater than one, there are two steady states, one determinate and the other indeterminate. If the...
Persistent link: https://www.econbiz.de/10005827487
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Stable Sunspot Equilibria in a Cash-in-Advance Economy
Evans, George W.; Honkapohja, Seppo; Marimon, Ramon - Barcelona Graduate School of Economics (Barcelona GSE) - 2003
We analyze a monetary model with flexible labor supply, cash-inadvance constraints and seigniorage-financed government deficits. If the intertemporal elasticity of substitution of labor is greater than one, there are two steady states, one determinate and the other indeterminate. If the...
Persistent link: https://www.econbiz.de/10010851434
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Expectational Stability of Stationary Sunspot Equilibria in a Forward-looking Linear Model
Evans, George W.; Honkapohja, Seppo - Department of Economics, University of Oregon - 2002
We consider the stability under adaptive learning of the complete set of solutions to the model x_i=beta(Ei*)(x_i+1) when |beat| 1. In addition to the fundamentals solution, the literature describes both finite-state Markov sunspot solutions and autoregressive solutions depending on an arbitrary...
Persistent link: https://www.econbiz.de/10005763194
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Existence of Adaptively Stable Sunspot Equilibria near an Indeterminate Steady State
Evans, George W.; Honkapohja, Seppo - Department of Economics, University of Oregon - 2002
We examine the nonlinear model x_t = E_t F(x_(t+1)). Markov SSEs exist near an indeterminate steady state, hat(x)=F(hat(x)), provided |F'(hat(x)| 1. Despite the importance of indeterminancy in macroeconomics, earlier results have not provided conditions for the existance of adaptively stable...
Persistent link: https://www.econbiz.de/10005593734
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Stable Finite-State Markov Sunspots
Evans, George W.; McGough, Bruce - Department of Economics, University of Oregon - 2006
known to exist in part of the indeterminacy region. The new type of equilibria, which we call ergodic k-SSEs, are driven by …
Persistent link: https://www.econbiz.de/10005635127
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Learning About Inflation Measures for Interest Rate Rules
Airaudo, Marco; Zanna, Luis-Felipe - Collegio Carlo Alberto, Università degli Studi di Torino - 2010
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a DSGE model featuring heterogeneous nominal rigidities across two sectors to study the equilibrium determinacy and stability under adaptive learning for interest rate rules...
Persistent link: https://www.econbiz.de/10008799719
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Equilibrium Determinacy and Inflation Measures for Interest Rate Rules
Airaudo, Marco; Zanna, Luis-Felipe - In: Review of Economic Dynamics 15 (2012) 4, pp. 573-592
Empirical evidence suggests that goods are highly heterogeneous with respect to the degree of price rigidity. We develop a two-sector dynamic general equilibrium model to study the equilibrium determinacy properties of interest rate rules that respond to inflation measures differing in their...
Persistent link: https://www.econbiz.de/10010575221
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Market Distortions and Local Indeterminacy: A General Approach
Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - Institute for the Study of Labor (IZA) - 2011
We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …
Persistent link: https://www.econbiz.de/10008922965
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Indeterminacy and multiple steady states with sector-specific externalities
Magris, Francesco - In: Economic Modelling 29 (2012) 6, pp. 2664-2672
. We show that in order to get indeterminacy, the presence of both aggregate and sector-specific external effects is needed … consumption. We perform a sensitivity analysis and show that indeterminacy emerges for parameter values in line with those used in …
Persistent link: https://www.econbiz.de/10010588233
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Indeterminacy under input-specific externalities and implications for fiscal policy.
Seegmuller, Thomas - Maison des Sciences Économiques, Université Paris 1 … - 2006
In this paper, we introduce input-specific externalities in a dynamic general equilibrium model with heterogeneous … low degrees of capital-labor substitution, we show that indeterminacy requires not only a lower bound for the elasticity … condition for indeterminacy and larger increasing returns promote sadlle-path stability when inputs are high substitutes. Using …
Persistent link: https://www.econbiz.de/10005220174