Linear Quadratic Optimization for Models with Rational Expectations
In this paper we present a method for using rational expectations in a linear-quadratic optimizationframework. Following the approach put forward by Sims, we solve the model through a QZdecomposition, which is generally easier to implement than the more widely used method of Blanchardand Kahn.
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|Date of creation:||Jul 1997|
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CARE Working Papers
9707, The University of Texas at Austin, Center for Applied Research in Economics.
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