Testing for Indeterminacy: An Application to U.S. Monetary Policy: Comment

摘要

The equilibrium of a rational expectations model is determinate if it is locally unique; it is indeterminate if many other equilibria are arbitrarily close to the first equilibrium. If equilibria are indeterminate, nonfundamental shocks may contribute to the variance of economic fluctuations and, if agents are risk averse, these fluctuations will reduce welfare. Hence, it is of some importance to a policymaker to ensure that his actions do not induce indeterminacy.