| dc.description.abstract | In an environment where economic structures break, variances change, distributions
shift, conventional policies weaken and past events tend to reoccur,
economic agents have to form expectations over different regimes. This makes
the regime-switching dynamic stochastic general equilibrium (RS-DSGE) model
the natural framework for analyzing the dynamics of macroeconomic variables.
We present efficient solution methods for solving this class of models, allowing
for the transition probabilities to be endogenous and for agents to react to
anticipated events. The solution algorithms derived use a perturbation strategy
which, unlike what has been proposed in the literature, does not rely on
the partitioning of the switching parameters. These algorithms are all implemented
in RISE, a
exible object-oriented toolbox that can easily integrate
alternative solution methods. We show that our algorithms replicate various
examples found in the literature. Among those is a switching RBC model for
which we present a third-order perturbation solution. | nb_NO |
