Research Paper No. 705

SOLVING THE DYNAMICS OF A NON-LINEAR REPRESENTATIVE AGENT MODEL

by

Ric D. Herbert & Peter J. Stemp

July 1999

Department of Economics. University of Melbourne. Parkville Victoria 3052 Australia
 
 

ABSTRACT

This paper describes two alternative approaches (modified reverse shooting and forward shooting) for solving the time-path of a representative agent model following an exogenous shock. In particular, reverse shooting is demonstrably better for solving part of the model but must be modified before it can be used to solve the full model. On the other hand, an unmodified form of forward shooting can be used to solve both part and full models.
 
 

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