Solving the multi-country real business cycle model using a perturbation method

Robert Kollmann , Jinill Kim (1) , Sunghyun H. Kim (2)

1 Division of Monetary Affairs
2 Department of Economics

This paper solves the multi-country RBC model described in den Haan, Judd and Juillard (2010) and Juillard and Villemot (2010), using a perturbation method. We explain how to apply first- and second-order versions of the gensys2.m algorithm to this model. The perturbation method is computationally cheap and can easily be applied to large models with possibly hundreds of state variables.

Mots clés: C6; First- and second-order perturbation method; Real business cycle model

Domaines: Économie et finance quantitative [q-fin]

Robert Kollmann, Jinill Kim, Sunghyun H. Kim. Solving the multi-country real business cycle model using a perturbation method. Journal of Economic Dynamics and Control, 2010, 35 (2), pp.203. ⟨10.1016/j.jedc.2010.09.012⟩. ⟨hal-00765826⟩