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 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, iii) it has a Blanchard-Kahn form. In addition to some 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 assessement.
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Bibliographic InfoPaper provided by Society for Computational Economics in its series Computing in Economics and Finance 1996 with number _035.
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Postal: Department of Econometrics, University of Geneva, 102 Bd Carl-Vogt, 1211 Geneva 4, Switzerland
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Expectations; Blanchard-Kahn form; reduction algorithms.;
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NBER Working Papers
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