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Solving Rational Expectations Models Using Excel

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  • Holger Strulik

Abstract

Simple problems of discrete-time optimal control can be solved using a standard spreadsheet software. The employed-solution method of backward iteration is intuitively understandable, does not require any programming skills, and is easy to implement so that it is suitable for classroom exercises with rational-expectations models. The author explains the method in general and shows how the basic models of neoclassical growth and real business cycles are solved using Microsoft Excel.

Suggested Citation

  • Holger Strulik, 2004. "Solving Rational Expectations Models Using Excel," The Journal of Economic Education, Taylor & Francis Journals, vol. 35(3), pages 269-283, July.
  • Handle: RePEc:taf:jeduce:v:35:y:2004:i:3:p:269-283
    DOI: 10.3200/JECE.35.3.269-283
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    References listed on IDEAS

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    Cited by:

    1. Toru Hokari & Masaki Iimura & Seiji Murakoshi & Yoshiko Onuma, 2007. "Simulating a Simple Real Business Cycle Model Using Excel," Computers in Higher Education Economics Review, Economics Network, University of Bristol, vol. 19(1), pages 16-20.

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