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Author: Seonghoon Cho
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
This paper generalizes the standard forward method of recursive substitution to a general class of linear Rational Expectations models with potentially multiple fundamental solutions. We propose a key property embedded in the forward solution -- the no-bubble condition -- as an economically sensible solution refinement in the class of fundamental solutions. In the literature, the no-bubble condition has been assumed to rule out non-fundamental bubble solutions. However, since the condition involves expectations of the future endogenous variables, it must be verified for every Rational Expectations equilibrium. We show that the forward solution is the only fundamental solution satisfying the no-bubble condition and that it is hard to justify economically fundamental solutions violating this condition. We provide several economic examples where the fundamental solutions obtained by other solution methods and refined by other solution selection criteria violate the no-bubble condition.
Author: Seonghoon Cho
Publisher:
ISBN:
Category :
Languages : en
Pages : 43
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Book Description
This paper generalizes the standard forward method of recursive substitution to a general class of linear Rational Expectations models with potentially multiple fundamental solutions. We propose a key property embedded in the forward solution -- the no-bubble condition -- as an economically sensible solution refinement in the class of fundamental solutions. In the literature, the no-bubble condition has been assumed to rule out non-fundamental bubble solutions. However, since the condition involves expectations of the future endogenous variables, it must be verified for every Rational Expectations equilibrium. We show that the forward solution is the only fundamental solution satisfying the no-bubble condition and that it is hard to justify economically fundamental solutions violating this condition. We provide several economic examples where the fundamental solutions obtained by other solution methods and refined by other solution selection criteria violate the no-bubble condition.
Author: Bennett T. MacCallum
Publisher:
ISBN:
Category : Econometric models
Languages : en
Pages :
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Book Description
Linear RE models typically possess a multiplicity of solutions. Consider, however, the requirement that the solution coefficients must not be infinitely discontinuous in the model's structural parameters. In particular, we require that the solutions should be continuous in the limit as those parameters, which express quantitatively the extent to which expectations affect endogenous variables, go to zero. The paper shows that under this condition there is, for a very broad class of linear RE models, only a single solution.
Author: Olivier J. Blanchard
Publisher:
ISBN:
Category : Rational expectations (Economic theory)
Languages : en
Pages : 38
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Book Description
Many methods have been proposed for the solution and simulation of medium or large size models under the assumption of rational expectations. The purpose of this paper is to present these methods, and to show how and where each can be applied. The methods fall into two groups. Methods in the first can be used to solve for perfect foresight paths in non-linear models. Methods in the second can be used in linear models, to solve either for paths or processes followed by endogenous variables. All the methods described here have been used in empirical applications and computer algorithms are available for most.
Author: Peter Jurriëns
Publisher:
ISBN:
Category :
Languages : en
Pages : 18
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Author: Charles H. Whiteman
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 37
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Author: Michael Malakellis
Publisher: Springer Science & Business Media
ISBN: 3642576605
Category : Business & Economics
Languages : en
Pages : 294
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Book Description
This monograph is concerned with the formulation and implementation of ORANI-INT, an intertemporal Computable General Equilibrium (CGE) model of the Australian economy. The aim is to bring together, in a balanced approach, theory and data for the purpose of developing a practical state-of-the-art tool for policy analysis. The modelling approach adopted is motivated by the recent trend in economy-wide modelling to combine the respective strengths of traditional CGE models and modern macroeconomic models. Traditional CGE models typically provide a dissagregate representation of the economy at a single point in time. Such models are useful for analysing issues involving the allocation of resources among the various agents identified at a particular point in time. Modern macroeconomic models, on the other hand, usually provide an aggregate representation of the economy over many points in time. Such models are useful for analysing issues involving the allocation of resources across time. A model that combines the strengths of static CGE models and modern macro-dynamic models is amenable to addressing a wide range of policy issues. To demonstrate this point ORANI-INT is used to analyse tariff reform.
Author: Morris Altman
Publisher: Edward Elgar Publishing
ISBN: 1839107944
Category : Business & Economics
Languages : en
Pages : 533
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Book Description
This comprehensive Handbook addresses a wide variety of methodological approaches adopted and developed by behavioural economists, exploring the implications of such innovations for analysis and policy.
Author: Wanpyo Son
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 268
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Author: N.M. Christodoulakis
Publisher: Elsevier
ISBN: 1483298825
Category : Business & Economics
Languages : en
Pages : 599
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Book Description
The Symposium aimed at analysing and solving the various problems of representation and analysis of decision making in economic systems starting from the level of the individual firm and ending up with the complexities of international policy coordination. The papers are grouped into subject areas such as game theory, control methods, international policy coordination and the applications of artificial intelligence and experts systems as a framework in economic modelling and control. The Symposium therefore provides a wide range of important information for those involved or interested in the planning of company and national economics.
Author: Man-Sik Yoo
Publisher:
ISBN:
Category :
Languages : en
Pages : 332
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