) 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 …

persistence than standard RBC models and can exhibit indeterminacy of rational expectations paths without increasing returns in …

stationary equilibria. The reason of this indeterminacy is that different price expectation functions of consumers lead to … arbitrariness which is responsible for the indeterminacy, but that the continuum of stationary equilibria emerges even if …

in response solely to future inflation induce real indeterminacy of equilibrium. Applying the Samuelson … by itself has a quantitatively negligible effect and almost all strict inflation-targeting rules lead to indeterminacy … stickiness, indeterminacy is much less likely to occur as policy also responds to output. With estimated labor supply elasticity …

sticky, and the less competitive firms are, the economy is likely to exhibit indeterminacy even if monetary policy is active. …