Comments on Farmer and Guo's "The Econometrics of Indeterminacy: An Applied Study"

Public

I argue that Farmer and Guo's one-sector real business cycle model with indeterminacy and sunspots fails empirically and that its failure is inherent in the logic of the model taken together with some simple labor market facts.

Published as "The Econometrics of Indeterminacy: An Applied Study: A Comment" in Carnegie-Rochester Conference Series on Public Policy, (Vol. 43, December 1995, pp. 273-284), https://doi.org/10.1016/0167-2231(95)90051-9.
An updated version of this Working Paper is available as Staff Report 196, https://doi.org/10.21034/sr.196.