Publication details

Model of Closed Economy with Rational Expectations

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Authors

HLOUŠEK Miroslav

Year of publication 2003
Type Article in Proceedings
Conference Mathematical Methods in Economics 2003
MU Faculty or unit

Faculty of Economics and Administration

Citation
Field Economy
Keywords rational expectations; closed economy model; Phillips curve
Description This paper shows the way of solving linear difference model under rational expectations. The whole procedure is described in general form. The conditions for existence of a unique solution summarized. The system is solved first for unstable part and then for stable part to get the final solution. There is made an application for macroeconomic model of closed economy. A reaction of agents in presence of shocks, when anticipated or not, is examined. Finally an influence of distinct types of Phillips curve on an adjustment process is discussed. The results ae illustrated in the figures.
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