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The standard approach to solving linear DSGE models is to apply the QZ method. It is a one-shot algorithm that leaves …
Persistent link: https://www.econbiz.de/10015206920
We construct the first algorithm for the perfect foresight solution of otherwise linear models with occasionally binding constraints, with fixed terminal conditions, that is guaranteed to return a solution in finite time, if one exists. We also provide a proof of the inescapability of the "curse...
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solution of linear DSGE models. We present and compare two Structure-Preserving Doubling Algorithms (SDAs) to other competing …
Persistent link: https://www.econbiz.de/10014444739
This paper presents and compares Bernoulli iterative approaches for solving linear DSGE models. The methods are … methods compare favorably in solving DSGE models to the QZ, providing similar accuracy as measured by the forward error of the …
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We introduce the market resources method (MRM) for solving dynamic optimization problems. MRM extends Carroll’s (2006) endogenous grid point method (EGM) for problems with more than one control variable using policy function iteration. The MRM algorithm is simple to implement and provides...
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