The RPEs of RBCs and other DSGEs

B-Tier
Journal: Journal of Economic Dynamics and Control
Year: 2022
Volume: 143
Issue: C

Authors (3)

Evans, David (not in RePEc) Evans, George W. (University of Oregon) McGough, Bruce (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

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

Abstract

In a broad class of non-linear representative agent models, represented by a system of difference equations, we replace rational expectations with linear forecast models conditioning on a predetermined set of regressors. Within this framework, a restricted perceptions equilibrium (RPE) corresponds to a forecast rule that is optimal within that class of models. Local uniqueness of a stationary rational expectations equilibrium (REE) near the non-stochastic steady state is shown to guarantee the existence, uniqueness and E-stability of an RPE local to that steady state. A benchmark RBC model with government spending shocks illustrates the theoretical results.

Technical Details

RePEc Handle
repec:eee:dyncon:v:143:y:2022:i:c:s0165188922001968
Journal Field
Macro
Author Count
3
Added to Database
2026-01-25