Accuracy in Simulations.
Since the actual solution to intertemporal rational expectations models is usually not known, it is useful to have criteria for judging the accuracy of a given numerical solution. In this paper, the authors propose a test for accuracy that is easy to implement and can be applied to a wide class of models without knowledge of the exact solution. They discuss the power of the test by simulating several models with the linear-quadratic approximation and with the method of parametrized expectations. The authors conclude that the test is powerful. Copyright 1994 by The Review of Economic Studies Limited.
Year of publication: |
1994
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Authors: | Haan, Wouter J Den ; Marcet, Albert |
Published in: |
Review of Economic Studies. - Wiley Blackwell, ISSN 0034-6527. - Vol. 61.1994, 1, p. 3-17
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Publisher: |
Wiley Blackwell |
Saved in:
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