Non-Linearities and Dynamics in a Neoclassical Model of Investment

R.D. Herbert and P.J. Stemp

No 671, Department of Economics - Working Papers Series from The University of Melbourne

Abstract: In this paper, we investigate the magnitude of errors that come about as a consequence of using a linear approximation to a well-known optimising model. We do this by taking a calibrated version of the neoclassical adjustment-cost model of investment due to Hayashi (1982).

Keywords: ECONOMICS; MACROECONOMICS; LINEAR MODELS (search for similar items in EconPapers)
JEL-codes: C61 E10 (search for similar items in EconPapers)
Pages: 7 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:mlb:wpaper:671

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