Solving Models with Off-the-Shelf Software: An Example of Potential Pitfalls Associated with the Use and Abuse of Default Parameter Settings
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چکیده
We consider a simple linear model with two stable eigenvalues (real-valued or complex-valued) and one unstable eigenvalue (real-valued). The chosen model is an extended version of a model previously described by Turnovsky (2000). It can be derived from the Sargent and Wallace (1973) extension of the Cagan (1956) model by adding a labour market defined by both employment and wages and by introducing sluggish adjustment for both these variables.
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تاریخ انتشار 2009