Abstract

LIZARAZU ALANEZ, Eddy. Numerical solution of a New Keynesian model using the Blanchard-Khan (1980) and Klein (2000) methods. Anál. econ. [online]. 2021, vol.36, n.92, pp.85-108.  Epub Oct 04, 2021. ISSN 2448-6655.  https://doi.org/10.24275/uam/azc/dcsh/ae/2021v36n92/lizarazu.

We use the procedures of Blanchard-Khan (1980) and Klein (2000) to numerically solve a New Keynesian model of rational expectations. With respect to this model, we show how to decouple the linear system of rational expectations depending on the state (predetermined) or control (non-predetermined) variables. The solution is plausible if we know the parameters of the model, it is also possible to extract the impulse-response functions to plot the time path of the endogenous variables driven by disturbances of the only stochastic exogenous variable, namely the natural product.

Keywords : Impulse-response function; Jordan canonical form; New Keynesian model; rational expectations; Schur decomposition; C01; C13; C15; E52; E58.

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