Can indeterminacy and self-fulfilling expectations solve the international macro puzzles?
McKnight, S.; Povoledo, L.;
Publisher: University of the West of England Economics Working Paper Series
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 when self-fulfilling... View more