Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/212245
Authors: 
Verona, Fabio
Wolters, Maik H.
Year of Publication: 
2013
Series/Report no.: 
Bank of Finland Research Discussion Papers 5/2013
Abstract: 
Macroeconomic models with sticky information include an infinite number of lagged expectations. Several authors have developed specialized solutions algorithms to solve these models under rational expectations. We demonstrate that it is also possible to implement this class of models in Dynare - a widely used software package for solving dynamic stochastic general equilibrium (DSGE) models. Using the Dynare macro language one can easily construct and change the required large number of lagged expectation terms. We assess the accuracy of simulations run with different truncation points for the lagged expectations terms and find that the solution is reasonably precise even for moderate truncation points.
Subjects: 
sticky information
Dynare
macro-processor
lagged expectations
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-08-0
Document Type: 
Working Paper

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