Foerster, Andrew T.; Rubio-Ramirez, Juan F; Waggoner, … - Federal Reserve Bank of Atlanta - 2013
This paper develops a general perturbation methodology for constructing high-order approximations to the solutions of Markov-switching DSGE models. We introduce an important and practical idea of partitioning the Markov-switching parameter space so that a steady state is well defined. With this...