Q1 consider the following macro modelwhere y p and m are

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Q1. Consider the following macro model:

165_Methods for solving rational expectations models.png

where y, p and m, are the logs of real output, prices and the money supply respectively and ?t is a monetary shock .

a) Identify three methods for solving rational expectations models?

b) Using your chosen method, find the rational expectations solution for prices (p) and output (y).

c) Using a maximum of 150 words discuss the policy implications of your results for monetary policy.

A examine your y data excluding the hold out period to : a examine your y data excluding the hold out period to determine if it needs to be differenced to make it stationary.

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Q1 consider the following macro modelwhere y p and m are : q1. consider the following macro modelwhere y p and m are the logs of real output prices and the money supply

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