On multiple equilibria and the rational expectations hypothesis

B-Tier
Journal: Economic Theory
Year: 1995
Volume: 7
Issue: 1
Pages: 113-124

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper analyzes through a simple two-period model the fact that, if some agents hold inside money intertemporally, the second-period "normalization" matters. Thus, there are several equilibria of the second-period economy, indexed by the level of inflation. A concept of equilibrium acknowledging this fact, and requiring that agents put some weight on any of the possible second-period equilibrium price vectors is developed. Such an equilibrium is shown to exist, and is illustrated by an example.

Technical Details

RePEc Handle
repec:spr:joecth:v:7:y:1995:i:1:p:113-124
Journal Field
Theory
Author Count
1
Added to Database
2026-01-29