Solving recent RBC models using linearization : further reserves

Boucekkine, Raouf;Fagnart, Jean-François
(1996) , 9 pages

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Abstract
Through a simple example, we show that the successiveı sophistications introduced in the early RBC models in order to improve their internal propagation mechanisms have actually increased their non-linearities, even locally. Accordingly, linearization-based resolution methods become nuch more disputable than they were for early RBC models. Simple comparative studies of impulse-response functions are used to illustrate this point. We conclude by pointing at some alternative resolution techniques that allow the model builder to take non-linearities into account and/or to handle with the presence of large state spaces.
Affiliations
  • Universidad Carlos III de MadridDepartamento de economía
  • University of Copenhagen

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Boucekkine, R., & Fagnart, J.-F. (1996). Solving recent RBC models using linearization : further reserves (Open access publications from Universidad Carlos III de madrid 96-27). https://hdl.handle.net/2078.5/38821