OccBin: A toolkit for solving dynamic models with occasionally binding constraints easily
Luca Guerrieri and
Matteo Iacoviello
Journal of Monetary Economics, 2015, vol. 70, issue C, 22-38
Abstract:
The toolkit adapts a first-order perturbation approach and applies it in a piecewise fashion to solve dynamic models with occasionally binding constraints. Our examples include a real business cycle model with a constraint on the level of investment and a New Keynesian model subject to the zero lower bound on nominal interest rates. Compared with a high-quality numerical solution, the piecewise linear perturbation method can adequately capture key properties of the models we consider. A key advantage of the piecewise linear perturbation method is its applicability to models with a large number of state variables.
Keywords: Occasionally binding constraints; DSGE models; Regime shifts; First-order perturbation (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (429)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304393214001238
Full text for ScienceDirect subscribers only
Related works:
Working Paper: OccBin: A Toolkit for Solving Dynamic Models With Occasionally Binding Constraints Easily (2014) 
Working Paper: OccBin: A Toolkit for Solving Dynamic Models With Occasionally Binding Constraints Easily (2014) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:70:y:2015:i:c:p:22-38
DOI: 10.1016/j.jmoneco.2014.08.005
Access Statistics for this article
Journal of Monetary Economics is currently edited by R. G. King and C. I. Plosser
More articles in Journal of Monetary Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().