‐probability, high‐impact events with accuracy and speed. We solve a standard New Keynesian model with Epstein–Zin preferences and time …‐varying disaster risk with perturbation, Taylor projection, and Smolyak collocation. Our main finding is that Taylor projection … delivers the best accuracy/speed tradeoff among the tested solutions. We also document that even third‐order perturbations may …

solution accuracy of existing methods by orders of magnitude, while drastically simplifying the solution algorithm. The …

. Linear approximation methods and perturbation methods have been explored in detail. Solving strategies such as the eigenvalue …