Solving Monetary (MIU) models with Linearized Euler Equations: Method of Undetermined Coefficients

Document Type : Research Paper

Authors

1 Department of Business Management, Tonekabon Branch, Islamic Azad University, Iran

2 Department of Management, Aliabad katoul branch, Islamic Azad University, Iran

Abstract

This paper attempts to solve a benchmark money in utility model by first order Taylor approximation to the policy function. After a brief summary of recent development in first order Taylor approximation in solving dynamic stochastic general equilibrium models, we choose Sidrauski’s Money in utility model as a standard model and follow the approach proposed by Uhlig [1] to solve for the recursive law of motion at first order.

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International Journal of Research in Industrial Engineering
Volume 6, Issue 2 - Serial Number 2
Spring 2017
Pages 172-183

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