On Linear Quadratic Approximations

Davide Debortoli and Ricardo Nunes

MPRA Paper from University Library of Munich, Germany

Abstract: We prove the generality of the methodology proposed in Benigno and Woodford (2006). We show that, even in the presence of a distorted steady state, it is always possible and relatively simple to obtain a purely quadratic approximation to the welfare measure. We also show that, in order to do so, the timeless perspective assumption is crucial.

Keywords: Linear-Quadratic Approximation; Distorted Steady State; Timeless Perspective (search for similar items in EconPapers)
JEL-codes: C60 E0 (search for similar items in EconPapers)
Date: 2006-07, Revised 2006-07
New Economics Papers: this item is included in nep-cba, nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:544

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