- Home
- Publications
- A Timeless Perspective On Optimality In Forward-Looking Rational Expectations Models
A Timeless Perspective on Optimality in Forward-Looking Rational Expectations Models
This paper discusses the `timeless perspective' optimisation concept with reference to a much-studied forward-looking rational expectations model. We establish that this policy, as usually described, is not always superior to a time consistent alternative on the basis of the stochastic equilibrium. We derive an alternative `timelessly optimal' rule which is globally optimal with respect to the unconditional variance and is therefore more supportable as a time consistent equilibrium.
Related Blog Posts
What is the Current State of the UK Economy?
Paula Bejarano Carbo
Stephen Millard
26 Feb 2024
7 min read
CPI Inflation Rose in December 2023, But is Likely to Fall Below 3 per cent by May
Huw Dixon
17 Jan 2024
7 min read
Related Projects
Related News
Why it’s not worth worrying that the UK has technically entered a recession
26 Feb 2024
4 min read
1.2 million UK Households Insolvent This Year as a Direct Result of Higher Mortgage Repayments
22 Jun 2023
2 min read
The Key Steps to Ensuring Normal Service is Quickly Resumed in the Economy
13 Feb 2023
4 min read
Related Publications
The Nature of the Inflationary Surprise in Europe and the USA
21 Mar 2024
Discussion Papers
UK Economy on the Road to Recovery in 2024 Following the Mild Recession
13 Mar 2024
GDP Trackers