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Algorithms for Solving Dynamic Models with Occasionally Binding Constraints

  • Lawrence J. Christiano
  • Jonas D.M. Fisher

We describe and compare several algorithms for approximating the solution to a model in" which inequality constraints occasionally bind. Their performance is evaluated and compared" using various parameterizations of the one sector growth model with irreversible investment. We" develop parameterized expectation algorithms which, on the basis of speed convenience of implementation, appear to dominate the other algorithms."

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Technical Working Papers with number 0218.

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Date of creation: Oct 1997
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Publication status: published as Christiano, Lawrence J. and Jonas D.M. Fisher. "Algorithms For Solving Dynamic Models With Occasionally Binding Constraints," Journal of Economic Dynamics and Control, 2000, v24(8,Jul), 1179-1232.
Handle: RePEc:nbr:nberte:0218
Note: EFG
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