This paper solves the multi-country RBC model described in den Haan et al. (this issue) and Juillard and Villemot (this issue), using a perturbation method. We explain how to apply first- and second-order versions of the gensys2.m algorithm to this model. The perturbation method is computationally cheap and can easily be applied to large models with possibly hundreds of state variables.
Copyright 2010 Elsevier B.V., All rights reserved.
- First- and second-order perturbation method
- Real Business Cycle model
ASJC Scopus subject areas
- Economics and Econometrics
- Control and Optimization
- Applied Mathematics