Optimal Policy in Rational Expectations Models : New Solution Algorithms ∗

@inproceedings{Dennis2006OptimalPI,
  title={Optimal Policy in Rational Expectations Models : New Solution Algorithms ∗},
  author={Richard Dennis},
  year={2006}
}
This paper develops methods to solve for optimal discretionary policies and optimal commitment policies in rational expectations models. These algorithms, which allow the optimization constraints to be conveniently expressed in second-order structural form, are more general than existing methods and are simple to apply. We use several New Keynesian business cycle models to illustrate their application. Simulations show that the procedures developed in this paper can quickly solve small-scale… CONTINUE READING
13 Citations
40 References
Similar Papers

References

Publications referenced by this paper.
Showing 1-10 of 40 references

A toolkit for analysing nonlinear dynamic stochastic models easily

  • H. Uhlig
  • 1999
Highly Influential
10 Excerpts

Inflation persistence

  • G. Moore
  • Quarterly Journal of Economics
  • 1995
Highly Influential
4 Excerpts

Open-economy inflation targeting

  • L. Svensson
  • Journal of International Economics
  • 2000
Highly Influential
4 Excerpts

Solution and estimation of RE macromodels with optimal policy

  • P. Söderlind
  • European Economic Review
  • 1999
Highly Influential
7 Excerpts

The consistency of optimal policy in stochastic rational expectations models

  • D. Backus, J. Driffill
  • Centre for Economic Policy Research Discussion…
  • 1986
Highly Influential
11 Excerpts

Inferring policy objectives from economic outcomes

  • R. Dennis
  • Oxford Bulletin of Economics and Statistics
  • 2004
2 Excerpts

Open loop time consistency for linear rational expectations models

  • A. Blake
  • Economics Letters
  • 2004
1 Excerpt

An alternative feedback solution for the infinite-horizon, linear-quadratic, dynamic, Stackelberg game

  • B. Chen, P. Zadrozny
  • Journal of Economic Dynamics and Control
  • 2002

Similar Papers

Loading similar papers…