Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients
This paper presents an undetermined-coefficients method for obtaining a linear approximation to the solution of a dynamic rational-expectations model. It also showshow that solution can be used to compute the model?s implications for impulse response functions and for second moments.
Suggested citation: Christiano, Lawrence, 1998. “Large Shareholders and Market Discipline in a Regulated Industry: A Clinical Study of Mellon Bank,” Federal Reserve Bank of Cleveland, Working Paper, no. 98-04.