Backsolving is a class of methods that generate simulated values for exogenous forcing processes in a stochastic equilibrium model from specified assumed distributions for Euler-equation disturbances. It can be thought of as a way to force the approximation error generated by inexact choice of...

If dynamic multivariate models are to be used to guide decisionmaking, it is important that probability assessments of forecasts or policy projections be provided. When identified Bayesian vector autoregression (VAR) models are presented with error bands in the existing literature, both...