Can indeterminacy and self-fulfilling expectations solve the international macro puzzles?
(2017)
Working Paper
McKnight, S., & Povoledo, L. Can indeterminacy and self-fulfilling expectations solve the international macro puzzles?
We introduce equilibrium indeterminacy into a two-country incomplete asset model with imperfect competition and analyze whether self-fulfilling expectations or beliefs can help resolve the major puzzles of international business cycles. We show that... Read More about Can indeterminacy and self-fulfilling expectations solve the international macro puzzles?.