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SOLVING LARGE-SCALE RATIONAL-EXPECTATIONS MODELS

Published online by Cambridge University Press:  02 March 2005

JESS GASPAR
Affiliation:
University of Chicago
KENNETH L. JUDD
Affiliation:
Hoover Institute

Extract

We explore alternative approaches to numerical solutions oflarge rational-expectations models. We discuss and compare severalcurrent alternatives, focusing on the trade-offs in accuracy, space,and speed. The models range from representative-agent models withmany goods and capital stocks, to models of heterogeneous agents withcomplete or incomplete asset markets. The methods includeperturbation and projection methods. We show that these methods arecapable of analyzing moderately large models even when we use onlyelementary, general-purpose numerical methods.

Information

Type
Research Article
Copyright
© 1997 Cambridge University Press

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