On Economic Structures and Model Solution Methods: Or Should Econometricians Use Newton Methods for Model Solution?

B-Tier
Journal: Oxford Bulletin of Economics and Statistics
Year: 1990
Volume: 52
Issue: 3
Pages: 317-30

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper makes the point that the choice of solution technique for nonlinear equation systems is a matter of trading the potentially smaller number of steps to convergence of formal Newton methods against the substantially smaller computational burden per step offered by simple first-order iterations such as the Gauss-Seidel method. Experiments with six typical macroeconomic models show that tradeoff to be sharply in favor of the latter. Moreover, reordering algorithms reduce all these models to near-recursive structures with relatively few feedback variables. This property is shown to be a natural consequence of the typical structure of an economic model. Copyright 1990 by Blackwell Publishing Ltd

Technical Details

RePEc Handle
repec:bla:obuest:v:52:y:1990:i:3:p:317-30
Journal Field
General
Author Count
2
Added to Database
2026-01-25