Another weakness of "determinacy" as a selection criterion for rational expectations models

Seonghoon Cho; Bennett T. McCallum

doi:10.1016/j.econlet.2009.03.005

Another weakness of "determinacy" as a selection criterion for rational expectations models

Seonghoon Cho, Bennett T. McCallum

Department of Economics

Research output: Contribution to journal › Article

3 Citations (Scopus)

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	https://doi.org/10.1016/j.econlet.2009.03.005
Publication status	Published - 2009 Jul 1

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All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

Cite this

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

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Access to Document

10.1016/j.econlet.2009.03.005