A Note on the Accuracy of Extended-Path Solution Methods for Dynamic General Equilibrium Economies

David Love

No 801, Working Papers from Brock University, Department of Economics

Abstract: We show that the deterministic Extended-Path (EP) method of Fair and Taylor (1983) solves standard dynamic stochastic general equilibrium models with similar accuracy to the best results reported in the literature for alternative methods. The EP method demands more computer time than other methods but has offsetting benefits in terms of simplicity and generality that make it an attractive choice.

Keywords: Dynamic stochastic equilibrium; computational methods; non-linear solutions (search for similar items in EconPapers)
JEL-codes: E10 E30 E37 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2008-04, Revised 2008-04
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:brk:wpaper:0801

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