Higher-Order Solutions to Dynamic, Discrete-Time Rational Expectations Models: Methods and an Application to Optimal Monetary Policy

Eric T. Swanson (), Gary S. Anderson and Andrew Theo Levin ()

No 576, Econometric Society 2004 North American Winter Meetings from Econometric Society

Abstract: We present an algorithm and software routines for computing nth-order approximate solutions to dynamic, discrete-time rational expectations models around a nonstochastic steady state. We apply these routines to investigate the optimal monetary policy with commitment (and from a ``timeless perspective'') in an optimizing-agent model with nominal price rigidities, subject to a fiscal policy that is stochastic, suboptimal, and exogenous to the central bank

Keywords: perturbation analysis; optimal monetary policy (search for similar items in EconPapers)
JEL-codes: C61 C63 E37 (search for similar items in EconPapers)
Date: 2004-08-11
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Working Paper: Higher-Order Solutions to Dynamic, Discrete-Time Rational Expectations Models: Methods and an Application to Optimal Monetary Policy (2003)
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