What you will learn
In these tutorials and videos I will present the perturbation approach to approximate the policy functions of DSGE models. We will cover both the theory and best practices and as well as implementation details in Dynare.
k-order perturbation theory
In this video tutorial we have an in-depth look at k-order perturbation techniques. The first 80 minutes of the video cover the ingredients, notation and mathematical concepts underlying the theory. The second-part goes into a detailed exposition of the algorithmic steps to recover the coefficients of the approximated policy functions. The focus is really on understanding the general algorithm and how the tools and concepts from the first part can be applied. We also cover implementation details in Dynare.