This page contains files related to the ABCs of RBCs.
Isabel's cover is an early version of the cover designed by my then seven year old daughter, Isabel. I still like it a lot. Harvard found it a bit too childish. I like the one they did as well, but this one wins my heart.
The zip file: ABCs of RBCs programs contains m files for all the programs in the book. The programs that generated figures 4.4 and 4.5 are included as separate file.
I am working on a chapter on Learning in DSGE models. The draft shown here is quite preliminary.
The addition to Chapter 12 shows the parameter spaces for a Taylor rule for which the model has a unique solution. Taylor rules based on rational expectations forecasts of inflation and output, on period t values of the variables, and of period t-1 values of the variables are considered.
Solving models with two step ahead expectations, such as some models with limited participation, requires solving a matrix cubic equation. A method for doing this that is based on Uhlig's method for solving quadratic equations is explained in "Solving two step ahead expectations". The method can be expanded in a straight-forward way to handle higher order equations.