Resource title

Approximate solutions to dynamic models: linear methods

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Resource description

Linear Methods are often used to compute approximate solutions to dynamic models, as these models often cannot be solved analytically. Linear methods are very popular, as they can easily be implemented. Also, they provide a useful starting point for understanding more elaborate numerical methods. It shall be described here first for the example of a simple real business cycle model, including how to easily generate the log-linearized equations needed before solving the linear system. For a general framework, formulas are provided for calculating the recursive law of motion. The algorithm described here is implemented with the toolkit programs available per http://www.wiwi.hu-berlin.de/wpol/html/toolkit.htm .

Resource author

Harald Uhlig

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25113

Resource license

Adapt according to the presented license agreement and reference the original author.