The full set of solutions of linear rational expectations models

• Characterisation of the extent of non-uniqueness in linear rational expectations models.
• Impulse response function for all solutions of linear rational expectations models.
• Some equilibria characterised as indeterminate in Lubik and Schorfheide (2003) turn out to be determinate.

This article characterises the dimension of indeterminacy of linear rational expectations (LRE) models and derives their full set of solutions. It extends the analysis of indeterminate equilibria in Lubik and Schorfheide (2003) where some equilibria are incorrectly classified as indeterminate even though they entail the same observable outcome.