CASSKOOPMANS—Solution of small dynamic linear model

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TomDoan
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Joined: Wed Nov 01, 2006 4:36 pm

CASSKOOPMANS—Solution of small dynamic linear model

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CASSKOOPMANS.RPF is an example of a simple dynamic linear model (Cass-Koopmans with production linear in capital) solved using DSGE. This has no expectational terms or shocks, so the only reason for using DSGE is to handle the unstable root (without solving it "backwards", capital explodes and virtually all the output goes into maintaining an ever increasing capital stock).

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