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Solving for the Global Nonlinear Saddlepath: Reverse Shooting vs. Approximation Methods

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Author Info
Manoj Atolia
Edward F. Buffie

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Abstract

The paper implements reverse shooting to solve for global nonlinear saddle path for optimal control problems with two state variables. It shows how to do reverse shooting. This will reduce entry barriers for researchers for whom this technique may be useful. For this purpose, user-friendly ‘plug-and- play’ programs are made available in public domain. These sample programs can be easily tailored to solve other problems as the search for the desired saddle path is done with very limited use of problem-specific information. The paper also compares the performance of existing approximation methods and finds their ranking in general depends on the nature of the problem, the variables that are of interest and the time horizon of interest

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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2005 with number 336.

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Date of creation: 11 Nov 2005
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Handle: RePEc:sce:scecf5:336

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Related research
Keywords: Reverse Shooting; Global Nonlinear Saddlepath Solution;

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Find related papers by JEL classification:
C63 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computational Techniques
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis

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References listed on IDEAS
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  1. Alfonso Novales & Emilio Dominguez & Javier J. Perez & Jesus Ruiz, 1998. "Solving Non-linear Rational Expectations Models By Eigenvalue-Eigenvector Decompositions," QM&RBC Codes 124, Quantitative Macroeconomics & Real Business Cycles. [Downloadable!]
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  1. Manoj Atolia, 2003. "Productivity-Enhancing Reforms, Private Capital Inflows, and Real Interest Rates in Africa," Working Papers wp2003_10_02, Department of Economics, Florida State University, revised Dec 2008. [Downloadable!]
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