Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/99752
Authors: 
Chatelain, Jean-Bernard
Ralf, Kirsten
Year of Publication: 
25-Jul-2014
Abstract: 
This paper demonstrates the existence of a finite set of equilibria in the case of the indeterminacy of linear rational expectations models. The number of equilibria corresponds to the number of ways to select n eigenvectors among a larger set of eigenvectors related to stable eigenvalues. A finite set of equilibria is a substitute to continuous (uncountable) sets of sunspots equilibria, when the number of independent eigenvectors for each stable eigenvalue is equal to one.
Subjects: 
linear rational expectations models
sunspots
indeterminacy
multiple equilibria
matrix Riccati equation
JEL: 
C60
C61
C62
E13
E60
Document Type: 
Preprint

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