Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/103808
Authors: 
Lan, Hong
Year of Publication: 
2014
Series/Report no.: 
SFB 649 Discussion Paper 2014-049
Abstract: 
I compare the performance of solution methods in solving a standard real business cycle model with labor market search frictions. Under the conventional calibration, the model is solved by the projection method using the Chebyshev polynomials as its basis, and the perturbation methods up to third order in both levels and logs. Evaluated by two accuracy tests, the projection approximation achieves the highest degree of accuracy, closely followed by the third order perturbation in levels. Although different in accuracy, all the approximated solutions produce simulated moments similar in value.
Subjects: 
Computational methods
DSGE
Business cycles
Search and matching
Accuracy test
JEL: 
C63
C68
E32
Document Type: 
Working Paper

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