Understanding self-fulfilling rational expectations equilibria in real business cycle models

Article Abstract:

Using dynamic models with rational expections, consumption decisions are based on the permanent income, not on the current income, so an alternative framework for understanding and deriving conditions of indeterminacy and its effects on preferences, technologies and market structures is offered.

Hong Kong, Financial Forecasting, Statistical Data Included, Consumption (Economics), Economic forecasting, Income, Business forecasting

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A method for taking models to the data

Article Abstract:

The hybrid model is developed by combining the powers of a dynamic, stochastic, general equilibrium model that consists of flexibility of a vector time-series model. The issues concerning the ability of real business cycle model are used to explain the movements in the aggregate output and employment.

Employment, Forecasts, trends, outlooks, Administration of General Economic Programs, Jobs & Employment, Forecasts and trends, Market trend/market analysis

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Endogenous money or sticky prices? - comment on monetary non-neutrality and inflation dynamics

Article Abstract:

A study examining the effect of monetary non-neutrality with respect to empirical finding is represented theoretically. In matching data, it is observed that flexible price models are not required to sticky price models. Endogenous monetary policy is efficient to explain inflation dynamics in a standard flexible price DSGE model where money is a veil.

Usage, Inflation (Finance), Monetary policy, Inflation (Economics), Phillips curve

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