We propose a novel approach to deal with the problem of indeterminacy in linear rational expectations models. The … number of explosive roots in presence of indeterminacy. The solution in this expanded state space, if it exists, is always … and any degree of indeterminacy, and it can be implemented even when the boundaries of the determinacy region are unknown …

imperfect capital markets and show that local indeterminacy always arises independently of the capital market regime. Also, we …

This paper demonstrates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational …

equilibrium indeterminacy for quantitative forecasting through standard reduced form forecast models. Exploiting U.S. data on both … of indeterminacy. It is argued that forecasting under indeterminacy with e.g. unrestricted VAR models entails …-to-one relationship between indeterminacy and superior forecastability, even when sunspot shocks play no role in generating the data …

of equilibria beyond the class of strongly stationary equilibria comes from the presence of indeterminacy: we propose a … restrict the domain of possible prices; then if some indeterminacy is left, expectation functions are introduced to make the …

fiscal policy rule, steady state indeterminacy may arise as a result of endogenously determined labor income tax rates. This … a combination of capital and labor income taxes. This paper revisits the issue of indeterminacy and aggregate …

fiscal policy rule, steady state indeterminacy may arise as a result of endogenously determined labor income tax rates. This … a combination of capital and labor income taxes. This paper revisits the issue of indeterminacy and aggregate …

Bayesian techniques that allow for both determinacy and indeterminacy of the equilibrium. Our empirical analysis shows that the … enough. We demonstrate that the impulse responses under indeterminacy exhibit different dynamics than those under determinacy …