Checking for saddlepoint stability: An easy test

Boucekkine, Raouf;Le Van, Cuong
(1996) Computational Economics — Vol. 9, n° 4, p. 317-330 (1996)

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Authors
  • Boucekkine, RaoufUniversidad Carlos III de Madrid
    Author
  • Le Van, CuongCEPREMAP
    Author
Abstract
In this paper, we present a theoretically founded procedure in order to check for saddlepoint stability of rational expectations models. The proposed device uses some specific perturbed finite time approximations of the models and allows for an explicit theoretical foundation. Numerical evidence are presented to study the feasibility of the procedure regarding to the scales and the spectra of the models. In particular, it is shown how to apply it on nonlinear models in connection with relaxation resolution algorithms. Actually, this paper gives a theoretical basis to the heuristic sensitivity tests traditionally conducted for saddlepoint stability assessment.
Affiliations
  • Universidad Carlos III de MadridDepartamento de economía
  • CEPREMAP

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Boucekkine, R., & Le Van, C. (1996). Checking for saddlepoint stability: An easy test. Computational Economics, 9(4), 317-330. https://doi.org/10.1007/BF00119478 (Original work published 1996)