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

Eric Swanson, Gary Anderson and Andrew Levin ()

No 146, Computing in Economics and Finance 2005 from Society for Computational Economics

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 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 methods; Mathematica; nth order; optimal monetary policy (search for similar items in EconPapers)
JEL-codes: C61 C63 E37 (search for similar items in EconPapers)
Date: 2005-11-11
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Persistent link: https://EconPapers.repec.org/RePEc:sce:scecf5:146

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