Solving The Multi-Country Real Business Cycle Model Using Ergodic Set Methods

The ingredients help to reduce the cost in high-dimensional problems: an endogenous grid enclosing the ergodic set, linear approximation methods, fixed-point iteration and efficient integration methods, such as non-product monomial rules and integration combined with regression. They authors show that high accuracy in intratemporal choice is crucial for the overall accuracy of solutions and offer two approaches, precomputation and iteration-on-allocation, that can solve for intratemporal choice both accurately and quickly. They also implement a hybrid solution algorithm that combines the perturbation and accurate intratemporal-choice methods.

Provided by: National Bureau of Economic Research Topic: Data Management Date Added: Aug 2010 Format: PDF

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