A 'Timeless Perspective' on Optimality in Forward-Looking Rational Expectations Models
This paper discusses the 'timeless perspective' optimisation concept with reference to a much-studied forward-looking rational expectations model. We establish that this policy, as usually described, is not always superior to a time consistent alternative on the basis of the stochastic equilibrium. We derive an alternative 'timelessly optimal' rule which is globally optimal with respect to the unconditional variance and is therefore more supportable as a time consistent equilibrium.
|Date of creation:||29 Aug 2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +44 1334 462479
Web page: http://www.res.org.uk/society/annualconf.aspEmail:
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ecj:ac2002:30. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.