Rational Expectation Hypothesis: An Application of the Blanchard and Khan Approach
This paper uses the solution of the linear difference model under rational expectation of Blanchard and Kahn (1980) to test the validity of the inflation stickiness and the Rational Expectation Hypotheses for the Brazilian economy during the period from 06/95 to 09/02. Using the Fuhrer-Moore model and GMM we find evidence favoring both hypothesis.
Volume (Year): 3 (2004)
Issue (Month): 22 ()
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- Roberts John M., 2005.
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- repec:nbr:nberre:0126 is not listed on IDEAS
- Taylor, John B, 1980.
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- Blanchard, Olivier Jean & Kahn, Charles M, 1980. "The Solution of Linear Difference Models under Rational Expectations," Econometrica, Econometric Society, vol. 48(5), pages 1305-11, July.
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