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Tito Moreira, Geraldo Souza and Charles Almeida
''Rational Expectation Hypothesis: An Application of the Blanchard and Khan Approach''
( 2004, Vol. 3 No.22 )
This paper uses the solution of the linear difference model under rational expectation of Blanchard and Kahn (1980) to test the validity of the inflation stickiness and the Rational Expectation Hypotheses for the Brazilian economy during the period from 06/95 to 09/02. Using the Fuhrer-Moore model and GMM we find evidence favoring both hypothesis.
Keywords: Fuhrer-Moore Model
JEL: C1 - Econometric and Statistical Methods: General
Manuscript Received : Jun 15 2004 Manuscript Accepted : Jun 26 2004

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