This paper derives a recursive method and the corresponding forward solution for linear Rational Expectations (RE) models in the class of fundamental solutions. Our recursive method is a generalization of the traditional forward method of recursive substitution when predetermined variables are...

Online appendix for the Review of Economic Dynamics article

This article complements the structural New-Keynesian macro framework with a no-arbitrage affine term structure model. Whereas our methodology is general, we focus on an extended macro-model with unobservable processes for the inflation target and the natural rate of output which are filtered...

At a time of historic challenges to the viability of the Eurozone, we assess the contribution of the EU and the Euro to equity market integration in Europe. We use a simple and essentially model free measure of bilateral market segmentation: two countries are segmented if there is a wide...