Discretionary Policy and Multiple Equilibria in LQ RE Models

S-Tier
Journal: Review of Economic Studies
Year: 2012
Volume: 79
Issue: 4
Pages: 1309-1339

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

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

Abstract

We study stationary discretionary equilibria in dynamic linear-quadratic rational expectations models. Past papers have assumed that this is uniquely determined; we show that such models can have multiple equilibria in some situations. We demonstrate the existence of multiple discretionary equilibria using a number of examples of increasing complexity and discuss their potential to explain interesting economic phenomena. We investigate the general properties of discretionary equilibria and discuss the design implications for the numerical algorithms needed to find them. Copyright , Oxford University Press.

Technical Details

RePEc Handle
repec:oup:restud:v:79:y:2012:i:4:p:1309-1339
Journal Field
General
Author Count
2
Added to Database
2026-01-24