A theory of pruning

Often, numerical simulations for dynamic, stochastic models in economics are needed. Higher order methods can be attractive, but bear the danger of generating explosive solutions in originally stationary models. Kim-Kim-Schaumburg-Sims (2008) proposed pruning to deal with this challenge for second order approximations. In this paper, we provide a theory of pruning and formulas for pruning of any order. We relate it to results described by Judd (1998) on perturbing dynamical systems.

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Year of publication:	2014
Authors:	Lombardo, Giovanni ; Uhlig, Harald
Publisher:	Frankfurt a. M. : European Central Bank (ECB)
Subject:	numerical economics \| numerical simulation \| Perturbation Methods \| pruning \| Taylor expansion

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Series:	ECB Working Paper ; 1696
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	791363619 [GVK] hdl:10419/154129 [Handle] RePEc:ecb:ecbwps:20141696 [RePEc]
Classification:	C63 - Computational Techniques ; C02 - Mathematical Methods ; C62 - Existence and Stability Conditions of Equilibrium
Source:	EconStor

Persistent link: https://www.econbiz.de/10011605741