Numerical Strategies for Solving the Nonlinear Rational Expectations Commodity Market Model

Authors:
Mario J. Miranda
Affiliations:
Ohio State University, 2120 Fyffe Road, Columbus, OH43210-1099, U.S.A. e-mail: miranda.4@osu.edu
Venue:
Computational Economics
Year:
1998

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Abstract

In this paper, I compare the accuracy, efficiency and stability ofdifferent numerical strategies for computing approximate solutions tothe nonlinear rational expectations commodity market model. I find thatpolynomial and spline function collocation methods are superior to thespace discretization, linearization and least squares curve-fittingmethods that have been preferred by economists in the past.