Rabitsch, Katrin; Stepanchuk, Serhiy - In: Economics Letters 124 (2014) 2, pp. 239-242
Using a stylized two-period model we compare portfolio solutions from two local solution approaches–the approach of Judd and Guu (2001) and the approach of Devereux and Sutherland (2010, 2011)–with the true nonlinear portfolio solution.