Walk on the Wild Side: Temporarily Unstable Paths and Multiplicative Sunspots

dc.contributor.authorAscari, Guido
dc.contributor.authorBanomolo, Paolo
dc.contributor.authorHEDIBERT FREITAS LOPES
dc.coverage.cidadeNão informadopt_BR
dc.coverage.paisNão Informadopt_BR
dc.creatorAscari, Guido
dc.creatorBanomolo, Paolo
dc.date.accessioned2022-08-24T17:24:42Z
dc.date.available2022-08-24T17:24:42Z
dc.date.issued2019
dc.description.otherWe propose a generalization of the rational expectations framework to allow for temporarily unstable paths. Our approach introduces multiplicative sunspot shocks and it yields drifting parameters and stochastic volatility. Then, we provide an econometric strategy to estimate this generalized model on the data. The methodology allows the data to choose between different possible alternatives: determi nacy, indeterminacy, and temporary instability. We apply our meth odology to US inflation dynamics in the 1970s through the lens of a simple New Keynesian model. When temporarily unstable paths are allowed, the data unambiguously select them to explain the stagfla tion period in the 1970spt_BR
dc.format.extentp. 1805–1842pt_BR
dc.format.mediumDigitalpt_BR
dc.identifier.doihttps://doi.org/10.1257/aer.20160576pt_BR
dc.identifier.issue5pt_BR
dc.identifier.urihttps://repositorio.insper.edu.br/handle/11224/4109
dc.identifier.volume109pt_BR
dc.language.isoInglêspt_BR
dc.publisherNão informadopt_BR
dc.relation.ispartofAmerican Economic Reviewpt_BR
dc.rights.licenseO INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR.pt_BR
dc.subject.keywordsNão informadopt_BR
dc.titleWalk on the Wild Side: Temporarily Unstable Paths and Multiplicative Sunspotspt_BR
dc.typejournal article
dspace.entity.typePublication
local.subject.cnpqCiências Sociais Aplicadaspt_BR
local.typeArtigo Científicopt_BR
relation.isAuthorOfPublication41f844cb-0e5a-4ef1-bb19-5ab1cec8e2ca
relation.isAuthorOfPublication.latestForDiscovery41f844cb-0e5a-4ef1-bb19-5ab1cec8e2ca
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