Abstract
This paper argues against determinacy as a guide to interpret rational expectations solutions, using an example in which a determinate solution exists but differs sharply in dynamic behavior from that implied by the model considered on a sector-by-sector basis.
| Original language | English |
|---|---|
| Pages (from-to) | 17-19 |
| Number of pages | 3 |
| Journal | Economics Letters |
| Volume | 104 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2009 Jul 1 |
All Science Journal Classification (ASJC) codes
- Finance
- Economics and Econometrics
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Cho, S., & McCallum, B. T. (2009). Another weakness of "determinacy" as a selection criterion for rational expectations models. Economics Letters, 104(1), 17-19. https://doi.org/10.1016/j.econlet.2009.03.005