Overview
In the previous chapter we have seen that the solution of a DGE model with a representative agent is given by a set of policy functions that relate the agent's choice variables to the state variables that characterize the agent's economic environment. In this chapter we explore methods that use local information to obtain either a linear or a quadratic approximation of the agent's policy function.
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© 2004 Springer-Verlag Berlin Heidelberg
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(2004). Perturbation Methods. In: Dynamic General Equilibrium Modeling. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-85685-6_2
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DOI: https://doi.org/10.1007/978-3-540-85685-6_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-03148-9
Online ISBN: 978-3-540-85685-6
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