Computational Economics

, Volume 43, Issue 3, pp 357–370 | Cite as

Sticky Information Models in Dynare

Article

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.

Keywords

Sticky information Dynare Macro-processor Lagged expectations 

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Monetary Policy and Research DepartmentBank of FinlandHelsinkiFinland
  2. 2.CEF.UPUniversity of PortoPortoPortugal
  3. 3.University of Kiel and Kiel Institute for the World EconomyKielGermany

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