On Linear Quadratic Approximations
We prove the generality of the methodology proposed in Benigno and Woodford (2006). We show that, even in the presence of a distorted steady state, it is always possible and relatively simple to obtain a purely quadratic approximation to the welfare measure. We also show that, in order to do so, the timeless perspective assumption is crucial.
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- Albert Marcet & Ramon Marimon, 2011.
Economics Working Papers
ECO2011/15, European University Institute.
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"Optimal taxation in an RBC model: A linear-quadratic approach,"
0405-16, Columbia University, Department of Economics.
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Computing in Economics and Finance 2001
3, Society for Computational Economics.
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- Jinill Kim & Sunghyun Henry Kim, 1999. "Spurious Welfare Reversals in International Business Cycle Models," Virginia Economics Online Papers 319, University of Virginia, Department of Economics.
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