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Title:Solution of RE Models with Anticipated Shocks and Optimal Policy PDF Logo
Authors:Wohltmann, Hans-Werner
Winkler, Roland C.
Issue Date:2007
Series/Report no.:Economics working paper / Christian-Albrechts-Universität Kiel, Department of Economics 2007,32
Abstract:The purpose of this paper is to solve linear dynamic rational expectations models with anticipated shocks by using the generalized Schur decomposition method. We also determine the optimal unrestricted and restricted policy responses to temporary as well as permanent shocks which both are anticipated by the public. In particular, our method is useful for the analysis of optimal monetary policy in New Keynesian dynamic general equilibrium models.
Subjects:Anticipated Shocks
Optimal Monetary Policy
Rational Expectations
Generalized Schur Decomposition
JEL:E52
C61
C32
Document Type:Working Paper
Appears in Collections:Economics Working Papers, Department of Economics, CAU Kiel

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