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Comparing Solution Methods for a Basic RBC Model
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 Title & Authors
Comparing Solution Methods for a Basic RBC Model
Joo, Semin;
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This short article compares different solution methods for a basic RBC model (Hansen, 1985). We solve and simulate the model using two main algorithms: the methods of perturbation and projection, respectively. One novelty is that we offer a type of the hybrid method: we compute easily a second-order approximation to decision rules and use that approximation as an initial guess for finding Chebyshev polynomials. We also find that the second-order perturbation method is most competitive in terms of accuracy for standard RBC model.
Projectoion Method;Chebyshev;Perturabtion Method;RBC Model Approximation;DSGE Model approximation;Computation Methods;
 Cited by
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