Terminal conditions in forward-looking economic models

In this paper we show how the popular L-B-J algorithm for solving forward-looking economic models using Newton methods can be gen- eralised to allow for a block of terminal equations for variables that appear with a lead. The e¤ect of choosing di¤erent types of termi- nal condition is explored in a simple stochastic growth model using WinSolve, a general nonlinear model solution package.

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Year of publication:	2006-03
Authors:	Pierse, Richard
Institutions:	School of Economics, University of Surrey

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Extent:	application/pdf
Series:	School of Economics Discussion Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 1006 12 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005748086