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Optimal Monetary Policy under Discretion

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important script information
company name:
Paolo Zagaglia
license: Shareware
minimum requirements: MATLAB 7.11 (2010b)
functional limitations:
Optimal Monetary Policy under Discretion description
This package computes the solution coefficients for the optimal linear quadratic monetary policy problem under discretion using the algorithm proposed by Richard Dennis in his article:"Optimal Policy in Rational Expectations Models: New Solution Algorithms" published in Macroeconomic Dynamics 11(1), February 2007, pp. 31-55.The routines follow the notation used in the paper.I have also included an example based on the macroeconomic model (equations 12 and 13) used by Frederico S. Finan and Robert Tetlow, 1999, "Optimal control of large, forward-looking models efficient solutions and two examples", Finance and Economics Discussion Series 1999-51, Board of Governors of the Federal Reserve SystemIMPORTANT NOTICE: This package makes use of dsyldouble.m and doubles.m. These functions compute the solution of a Sylvester equation system using the doubling algorithm. They can be freely downloaded from:http://www.math.niu.edu/~anderson/ahms/alg...ms/dsyldouble.mhttp://www.math.niu.edu/~anderson/ahms/algorithms/doubles.m
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version 1.0
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