Solving Rational Expectations Models Using Excel

19 Pages Posted: 27 Mar 2003  

Holger Strulik

University of Goettingen (Gottingen) - School of Law, Economics, Social Sciences

Date Written: December 1, 2002

Abstract

The paper explains how simple problems of discrete time optimal control can be solved using a standard spreadsheet software. The employed solution method of backward iteration is intuitively understandable, does not require any programming skills, and is very easy to implement so that it is suitable for classroom exercises with rational expectations models. The paper explains the method in general and shows how the basic models of neoclassical growth and real business cycles are solved using Microsoft Excel.

JEL Classification: C61, A23, O40

Suggested Citation

Strulik, Holger, Solving Rational Expectations Models Using Excel (December 1, 2002). Available at SSRN: https://ssrn.com/abstract=390762

Holger Strulik (Contact Author)

University of Goettingen (Gottingen) - School of Law, Economics, Social Sciences ( email )

Germany

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