Euler Equation Approach for Emerging-market Macro Models

Bulent Guler and Tack Yun ()

International Economic Journal, 2013, vol. 27, issue 2, 201-215

Abstract: This paper focuses on how to obtain numerical solutions to emerging-market DSGE models with occasionally binding constraints by using the Euler equation, rather than using value functions of households. The main point is that the Euler-equation approach works in a fast and simple way for a variety of recent emerging-market macro models. An important reason behind this point is that it is relatively easy to pin down the functional form of aggregate equilibrium conditions in these models. The time-iteration method is applied to Euler equations of a small open-economy with overborrowings. It is discussed how to use the Euler equation approach to recent models of sovereign debt and to show that the presence of the Laffer-curve of debt-revenues leads us to use the piecewise parameterized-expectations approach.

Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10168737.2013.796111 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:intecj:v:27:y:2013:i:2:p:201-215

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RIEJ20

DOI: 10.1080/10168737.2013.796111

Access Statistics for this article

International Economic Journal is currently edited by Jaymin Lee Editor

More articles in International Economic Journal from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().