How to get the Blanchard-Kahn form from a general linear rational expectations model
AbstractIn this paper, we prove that every linear model with rational expectations can be transformed by the means of an one-to-one mapping into another model which has one of the following properties: i) it is degenerated, ii) it is backward, ii) it has the Blanchard-Kahn form. In addition to sorne simple illustrations, we provide two applications on two nonlinear forward-looking economic models in order to show how to use our theoretical analysis for local stability assessment.
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Rational Expectations; Blanchard-Kahn Form; Reduction Algorithms;
Other versions of this item:
- Raouf Boucekkine & Cuong Le Van & Katheline Schubert, . "How to Get the Blanchard-Kahn Form from a General Linear Rational Expectations Model," Computing in Economics and Finance 1996 _035, Society for Computational Economics.
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