Analysis of the open macroeconomy model with rational expectations

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DAVID Stanislav VAŠÍČEK Osvald

Year of publication 2004
Type Article in Periodical
Magazine / Source Bulletin České ekonometrické společnosti
MU Faculty or unit

Faculty of Economics and Administration

Field Economy
Keywords Macroeconomic model; stability; zeros and poles; rational expectations
Description The article focuses on the multiple-equations closed-economy macroeconomic model to illustrate the impact of the rational expectation hypothesis. The first stage of the analysis introduces a theoretical model. It contains Phillips curve, IS curve and Taylor policy rule. The second stage of the analysis estimates the states and parameters of the model on the quarterly data of the Czech economy. The third stage of the analysis focuses on the theoretical approach, how to compute rational expectations. In the final stage, the article demonstrates implications of the hypothesis through the response of the model. This shows response on the outputs of the macroeconomic model to anticipated and unanticipated shocks.
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