This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Situations under which the fiscal authority is able to exploit the central bank's commitment to zero inflation are examined. An example using a calibrated model shows that, in...

This paper is concerned with the development of computationally efficient algorithms for the solution of the dynamics of macroeconomic models. The paper focuses on a particular continuous-time macroeconomic model. In the paper we exploit the model structure to improve the efficiency of solving...

This paper shows how a forward-shooting algorithm can be easily implemented using the Matlab programming language. In the paper we develop and implement a forward-shooting numerical algorithm for computing the dynamics of a small representative agent macroeconomic model when subjected to an...

Most recent studies of dynamic macroeconomic relationships focus on models derived from optimising behaviour by economic agents. In most of these models, the eigenvalues of the associated dynamical system are real-valued and so the time-path of the system exhibits monotonic or near-monotonic...

Two common properties of macroeconomic models are saddle-path instability and the existence of non-linearities. Under these circumstances, a common approach is to make analysis more tractable by linearising the model in the neighbourhood of an appropriate steady-state. The linearised model is...