On the accuracy of low-order projection methods

Paul Pichler ()

Economics Bulletin, 2007, vol. 3, issue 50, 1-8

Abstract: We use low-order projection methods to compute numerical solutions of the basic neoclassical stochastic growth model. We assess the quality of the obtained solutions, and compare them to numerical approximations derived with first and second-order perturbation techniques. We show that projection methods perform surprisingly poor when the degree of approximation is very low, and we provide some intuition behind this finding.

Keywords: numerical; accuracy (search for similar items in EconPapers)
JEL-codes: C6 E0 (search for similar items in EconPapers)
Date: 2007-10-10
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