Solving Non-Linear Rational Expectations Models: Approximations based on Taylor Expansions
نویسنده
چکیده
----------------------------------------------------------------------------------------------------------------This paper presents an algorithm that computes Taylor series expansions of order k=2, 3, 4 of the policy function of non-linear rational expectations models. Approximations of order 2 k ≥ may be markedly more accurate than linear approximations (k=1) if the variability of the exogenous shocks is high and/or the model exhibits strong curvature. -----------------------------------------------------------------------------------------------------------------
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تاریخ انتشار 2005