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Notes on Linear Rational Expectations Models: Comparing Klein (2000) and Sims (2002)

posted Mar 17, 2013, 11:15 AM by Elmar Mertens   [ updated Apr 19, 2013, 8:02 AM ]
This note maps the solution method of Klein into Sim's approach. Sims can handle more general cases, but when using the same setup as in Klein, his method -- of course -- yields identical results. This should not be news, but comparing both methods using a cosistent notation, might be helpful. The note applies both methods to the following setup:



Here is the document: pdf
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