Determinacy analysis in high order dynamic systems: The case of nominal rigidities and limited asset market participation

C-Tier
Journal: Economics Letters
Year: 2017
Volume: 159
Issue: C
Pages: 82-87

Score contribution per author:

0.335 = (α=2.01 / 3 authors) × 0.5x C-tier

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

Abstract

We show how to use Hurwitz polynomials to study the stability and uniqueness of Rational Expectation equilibria (REE) in Dynamic General Equilibrium models (DGE). We apply this method to a model characterized by sticky wages and prices and by limited asset market participation (LAMP). We prove analytically in a fourth-order dynamics system that, once nominal wage stickiness is taken into account, LAMP does not invalidate the Taylor Principle.

Technical Details

RePEc Handle
repec:eee:ecolet:v:159:y:2017:i:c:p:82-87
Journal Field
General
Author Count
3
Added to Database
2026-01-24