A theory of pruning

Giovanni Lombardo and Harald Uhlig ()

No 1696, Working Paper Series from European Central Bank

Abstract: Often, numerical simulations for dynamic, stochastic models in economics are needed. Higher order methods can be attractive, but bear the danger of generating explosive solutions in originally stationary models. Kim-Kim-Schaumburg-Sims (2008) proposed pruning to deal with this challenge for second order approximations. In this paper, we provide a theory of pruning and formulas for pruning of any order. We relate it to results described by Judd (1998) on perturbing dynamical systems. JEL Classification: C63, C02, C62

Keywords: numerical economics; numerical simulation; Perturbation Methods; pruning; Taylor expansion (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-cmp and nep-ore
Note: 656519
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Journal Article: A THEORY OF PRUNING (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:20141696

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