Chatelain, Jean-Bernard; Ralf, Kirsten - In: Economics Bulletin 40 (2020) 2, pp. 1797-1803
With non-controllable auto-regressive shocks, the welfare of Ramsey optimal policy is the solution of a single Riccati … welfare function. There is no need to simulate impulse response functions over a long period, to compute period loss functions … and to sum their discounted value over this long period, as currently done so far. Welfare is computed for the case of the …