Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18846
Authors: 
Heer, Burkhard
Maußner, Alfred
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper 1207
Abstract: 
We compare the numerical methods that are most widely applied in the computation of the standard business cycle model with flexible labor. The numerical techniques imply economically insignificant differences with regard to business cycle summary statistics except for the volatility of investment. Furthermore, these results are robust with regard to the choice of the functional form of the utility function and the model's parameterization. In conclusion, the simplest and fastest method, the log-linearization of the model around the steady state, is found to be most convenient and appropriate for the standard business cycle model.
Subjects: 
log-linearization
projection methods
extended path
value function iteration
parameterized expectations
genetic search
JEL: 
E32
C68
C63
Document Type: 
Working Paper

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