A sunspot paradox

A sunspot paradox

This paper shows that the local stability properties of dynamic general equilibrium macroeconomic models may depend on the length of a period in the model economy. This leads to the following paradoxical situation: The economy may be driven by sunspots for some decision frequencies, while sunspots c...

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Veröffentlicht in:Economics letters 2005-05, Vol.87 (2), p.285-290
1. Verfasser: Hintermaier, Thomas
Format: Artikel
Sprache:eng
Schlagworte:
Economic models
Economics
Frequency
High frequency
Macroeconomics
Sunspots
Temporal aggregation
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Beschreibung
Zusammenfassung:This paper shows that the local stability properties of dynamic general equilibrium macroeconomic models may depend on the length of a period in the model economy. This leads to the following paradoxical situation: The economy may be driven by sunspots for some decision frequencies, while sunspots can have no impact at other decision frequencies.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2005.01.001