Precision Performances of Terminal Conditions for Short Time Horizons Forward-Looking Systems
In this paper we investigate theoretically the numerical bias due to the truncation of structurally infinite time forward-looking models, by the means of various terminal conditions. On a general multivariate optimal growth model, we first analytically confirm some well-known heuristic properties for certain extreme spectral cases. However, we show that the heuristic findings stated in the literature, relying on intermediate spectral configurations, lack theoretical basis as that they omit, among other relevant features, the crucial role of initial conditions: in this case, comparison criteria exclusively based on spectral considerations lack theoretical sense. Numerical evidence is proposed to illustrate this point and other related empirical findings are presented. Citation Copyright 1997 by Kluwer Academic Publishers.
Volume (Year): 10 (1997)
Issue (Month): 2 (May)
|Contact details of provider:|| Web page: http://www.springerlink.com/link.asp?id=100248|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:kap:compec:v:10:y:1997:i:2:p:169-86. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.