explain the previous stylized fact, a second order solution of a general equilibrium model for a small open economy is … evaluated. By analyzing the second order solution we relax the assumption of certainty equivalence which permits consider the … money demand). In order to explain the previous stylized fact, a second order solution of a general equilibrium model for a …

Classification: E52, E42, E12, C63 Keywords: Second Order Solution, Oil Price Shocks, Endogenous Trade-off This paper was …). The second-order solution has the advantage of incorporating the e�ects of shocks volatility on the equilibrium, which are … solution for the rational expectations equilibrium, instead of a log-linear one. Thus, the second-order solution, by relaxing …

benchmark New Keynesian model with oil price shocks. In contrast with log linear approximations, the second order solution … monetary policy. Second, we evaluate numerically the second order solution of the model to explain the episode of high and …