Publication details
Model of Closed Economy with Rational Expectations
| Authors | |
|---|---|
| Year of publication | 2003 |
| Type | Article in Proceedings |
| Conference | Mathematical Methods in Economics 2003 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | rational expectations; closed economy model; Phillips curve |
| Description | This paper shows the way of solving linear difference model under rational expectations. The whole procedure is described in general form. The conditions for existence of a unique solution summarized. The system is solved first for unstable part and then for stable part to get the final solution. There is made an application for macroeconomic model of closed economy. A reaction of agents in presence of shocks, when anticipated or not, is examined. Finally an influence of distinct types of Phillips curve on an adjustment process is discussed. The results ae illustrated in the figures. |
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