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The Dimension of the Set of Causal Solutions of Linear Multivariate Rational Expectations Models

Bernd Funovits

arXiv 11 Feb 2020 · Econometrics · 1 citations (OpenAlex)

arXiv:2002.04369 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper analyses the number of free parameters and solutions of the structural difference equation obtained from a linear multivariate rational expectations model. First, it is shown that the number of free parameters depends on the structure of the zeros at zero of a certain matrix polynomial of the structural difference equation and the number of inputs of the rational expectations model. Second, the implications of requiring that some components of the endogenous variables be predetermined are analysed. Third, a condition for existence and uniqueness of a causal stationary solution is given.

Citation extraction

49
references
145
in-text mentions
51
distinct cited
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self-citations
18,625
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Olivier J. Blanchard and Charles M. Kahn (1980) The Solution of Linear Difference Models under Rational Expectations1.000154100%
2Christopher A. Sims (2001) Solving Linear Rational Expectations Models1.000143100%
3Robert G. King and Mark W. Watson (1998) The Solution of Singular Linear Difference Systems under Rational Expectations1.000115100%
4Laurence Broze, Christian Gouriéroux, and Ariane Szafarz (1995) Solutions of Multivariate Rational Expectations Models0.98932897%
5Thomas A. Lubik and Frank Schorfheide (1889) Computing Sunspot Equilibria in Linear Rational Expectations Models0.87482100%
6Ivanka Komunjer and Serena Ng (2011) Dynamic Identification of Dynamic Stochastic General Equilibrium Models0.87452100%
7Laurence Broze, Christian Gouriéroux, and Ariane Szafarz (1985) Solutions of Linear Rational Expectations Models0.84333100%
8Israel Gohberg, Peter Lancaster, and Leiba Rodman (2006) Invariant Subspaces of Matrices with Applications0.73732100%
9Felix R. Gantmacher (1959) The Theory of Matrices, volume 20.64422100%
10Edward J. Hannan and Manfred Deistler (2012) The Statistical Theory of Linear Systems0.64422100%

Showing the top 10 of 51 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1The Spectral Approach to Linear Rational Expectations Models0.64422