265-273

• Chappell, David

A generalised solution method for rational expectations models which are representable by systems of first-order linear differential equations with constant coefficients is introduced. The existing literature relies on the existence of a similarity transformation which can be used to diagonalize the coefficient matrix of the model. The method presented in this paper may also be used when such a transformation does not exist. A simple example for which a diagonalizing transformation does not exist is used to illustrate the application of the solution method.

• Mathematics
• Computer and information sciences

• Statistics

Περιέχει σημειώσεις και βιβλιογραφία, The author is grateful to Tony Sampson for helpful discussions, but the usual caveat applies.