Search Results

SORT BY: PREVIOUS / NEXT
Keywords:Perturbation 

Working Paper
Diagnosing and treating bifurcations in perturbation analysis of dynamic macro models

In perturbation analysis of nonlinear dynamic systems, the presence of a bifurcation implies that the first-order behavior of the economy cannot be characterized solely in terms of the first-order derivatives of the model equations. In this paper, we use two simple examples to illustrate how to detect the existence of a bifurcation. Following the general approach of Judd (1998), we then show how to apply l'Hospital's rule to characterize the solution of each model in terms of its higher-order derivatives. We also show that in some cases the bifurcation can be eliminated through ...
Finance and Economics Discussion Series , Paper 2007-14

Working Paper
When it Rains it Pours: Cascading Uncertainty Shocks

We empirically document that serial uncertainty shocks are (1) common in the data and (2) have an increasingly stronger impact on the macroeconomy. In other words, a series of bad (positive) uncertainty shocks exacerbates the economic decline significantly. From a theoretical perspective, these findings are puzzling: existing benchmark models do not deliver the observed amplification. We show analytically that a state dependent precautionary motive with respect to uncertainty shocks is required. Our derivations suggest that the state dependent precautionary motive only shows up at fourth ...
Finance and Economics Discussion Series , Paper 2020-064

FILTER BY year

FILTER BY Content Type

FILTER BY Author

Diercks, Anthony M. 1 items

Hsu, Alex 1 items

Kim, Jinill 1 items

Levin, Andrew T. 1 items

Tamoni, Andrea 1 items

Yun, Tack 1 items

show more (1)

FILTER BY Jel Classification

C63 1 items

C68 1 items

E37 1 items

PREVIOUS / NEXT