Galizia, Dana - In: Quantitative economics : QE ; journal of the … 12 (2021) 3, pp. 869-901
Unlike linear ones, nonlinear business cycle models can generate sustained fluctuations even in the absence of shocks (e.g., via limit cycles/chaos). A popular approach to solving nonlinear models is perturbation methods. I show that, as typically implemented, these methods are incapable of...