scholarly journals System Reduction and Finite-Order VAR Solution Methods for Linear Rational Expectations Models

2016 ◽  
Vol 2016 (285) ◽  
Author(s):  
Enrique Martínez-García ◽  
Keyword(s):  
Finite Order ◽  
Rational Expectations ◽  
System Reduction ◽  
Solution Methods

Solving Rational Expectations Models

2018 ◽  
Author(s):  
Jean Barthélemy ◽  
Magali Marx
Keyword(s):  
Regime Switching ◽  
Rational Expectations ◽  
Linear Models ◽  
Nonlinear Models ◽  
Special Focus ◽  
Perturbation Approach ◽  
Common Solution ◽  
Switching Models ◽  
Solution Methods ◽  
Occasionally Binding Constraints

This chapter presents theoretical foundations of main methods of solving rational expectations models with a special focus on perturbation approaches. First, it gives some insights into the solution methods for linear models. Second, it shows how to use the perturbation approach for solving nonlinear models. It then documents the limits of this approach. The perturbation approach, though the most common solution method in the macroeconomic literature, is inappropriate in contexts of large fluctuations (large shocks or regime switching) and of strong nonlinearities (e.g., occasionally binding constraints). The former case is illustrated by regime switching models. The latter case is illustrated by a study of existing methods for solving rational expectations models under the zero lower bound constraint, that is, the condition of non-negativity of the nominal interest rate. The chapter concludes with a presentation of global methods available when the perturbation approach fails in solving models.

System Reduction Method Using Spectrum of Power Oscillation Waveform

2015 ◽  
Vol 135 (4) ◽  
pp. 241-250 ◽  
Author(s):  
Hideo Koseki ◽  
Masaki Nagata ◽  
Hideo Hosogoe ◽  
Hiroshi Takada ◽  
Takanori Shuto ◽  
...  
Keyword(s):  
Reduction Method ◽  
Power Oscillation ◽  
System Reduction
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