Value Function and Optimal Decision Rules of a Linear-quadratic Approximation
AbstractThis code supports the text in Javier Diaz-Gimenez, Linear Quadratic Approximations: An Introduction, Ramon Marimon and Andrew Scott (eds), Computational Methods for the Study of Dynamic Economies, Chapter 2, Oxford University Press. The functional form of many dynamic optimization problems is so complicated that it is impossible to find a closed-form solution. After having calculated the steady state or stable growth path of the economy, one can expand the utility function around that state with an LQ-approximation to study the dynamic behaviour of the model under small shocks.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoSoftware component provided by Quantitative Macroeconomics & Real Business Cycles in its series QM&RBC Codes with number 122.
Programming language: Matlab
Date of creation: 1998
Date of revision:
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann).
If references are entirely missing, you can add them using this form.