@@ -21,15 +21,15 @@ is described by the differentiable, conditional cumulant generating function (cc
2121
2222``` math
2323\begin{aligned}
24- \kappa[\alpha(z_t) \mid z_t] = \log\mathbb{E}_t[\exp(\alpha(z_t)' \varepsilon_{t + 1})],\quad \text{ for any differentiable map }\alpha:: \mathbb{R}^{n_z}\rightarrow\mathbb{R}^{n_\varepsilon}.
24+ \kappa[\alpha(z_t) \mid z_t] = \log\mathbb{E}_t[\exp(\alpha(z_t)' \varepsilon_{t + 1})],\quad \text{ for any differentiable map }\alpha:\mathbb{R}^{n_z}\rightarrow\mathbb{R}^{n_\varepsilon}.
2525\end{aligned}
2626```
2727
2828The functions
2929``` math
3030\begin{aligned}
3131\xi:\mathbb{R}^{2n_y + 2n_z}\rightarrow \mathbb{R}^{n_y},& \quad \mu:\mathbb{R}^{n_y + n_z}\rightarrow \mathbb{R}^{n_z},\\
32- \Lambda:: \mathbb{R}^{n_z} \rightarrow \mathbb{R}^{n_z \times n_y}, & \quad \Sigma:: \mathbb{R}^{n_z}\ \rightarrow \mathbb{R}^{n_z\times n_\varepsilon}
32+ \Lambda:\mathbb{R}^{n_z} \rightarrow \mathbb{R}^{n_z \times n_y}, & \quad \Sigma:\mathbb{R}^{n_z}\ \rightarrow \mathbb{R}^{n_z\times n_\varepsilon},
3333\end{aligned}
3434```
3535are differentiable. The first two functions characterize the effects of time `` t `` variables on the expectational and
@@ -54,31 +54,31 @@ global solutions of canonical economic models and outperforms perturbations arou
5454The affine approximation of an dynamic economic model is
5555``` math
5656\begin{aligned}
57- \mathbb{E}[z_{t + 1}] & = \mu(z, y) + \Gamma_1(z_t - z) + \Gamma_2(y_t - y)\\
58- 0 & = \xi(z, y) + \Gamma_3(z_t - z) + \Gamma_4(y_t - y) + \Gamma_5 \mathbb{E}_t z_{t + 1} + \Gamma_6 \mathbb{E}_t y_{t + 1} + \mathscr {V}(z) + J\mathscr {V}(z)(z_t - z),
57+ \mathbb{E}[z_{t + 1}] & = \mu(z, y) + \Gamma_1(z_t - z) + \Gamma_2(y_t - y), \\
58+ 0 & = \xi(z, y) + \Gamma_3(z_t - z) + \Gamma_4(y_t - y) + \Gamma_5 \mathbb{E}_t z_{t + 1} + \Gamma_6 \mathbb{E}_t y_{t + 1} + \mathcal {V}(z) + J\mathcal {V}(z)(z_t - z),
5959\end{aligned}
6060```
6161
6262where `` \Gamma_1, \Gamma_2 `` are the Jacobians of `` \mu `` with respect to `` z_t `` and `` y_t `` , respectively;
6363`` \Gamma_3, \Gamma_4 `` are the Jacobians of `` \xi `` with respect to `` z_t `` and `` y_t `` , respectively;
64- `` \Gamma_5, \Gamma_6 `` are constant matrices; `` \mathscr {V}(z) `` is the model's entropy;
65- `` J\mathscr {V}(z) `` is the Jacobian of the entropy;
66- `` J\mathscr {V}(z) `` is the Jacobian of the entropy;
64+ `` \Gamma_5, \Gamma_6 `` are constant matrices; `` \mathcal {V}(z) `` is the model's entropy;
65+ `` J\mathcal {V}(z) `` is the Jacobian of the entropy;
66+ `` J\mathcal {V}(z) `` is the Jacobian of the entropy;
6767
6868and the state variables `` z_t `` and jump variables `` y_t `` follow
6969``` math
7070\begin{aligned}
7171 z_{t + 1} & = z + \Gamma_1(z_t - z) + \Gamma_2(y_t - y) + (I_{n_z} - \Lambda(z_t) \Psi)^{-1}\Sigma(z_t)\varepsilon_{t + 1},\\
72- y_t & = y + \Psi(z_t - z)
72+ y_t & = y + \Psi(z_t - z).
7373\end{aligned}
7474```
7575
7676The unknowns `` (z, y, \Psi) `` solve the system of equations
7777``` math
7878\begin{aligned}
79790 & = \mu(z, y) - z,\\
80- 0 & = \xi(z, y) + \Gamma_5 z + \Gamma_6 y + \mathscr {V}(z),\\
81- 0 & = \Gamma_3 + \Gamma_4 \Psi + (\Gamma_5 + \Gamma_6 \Psi)(\Gamma_1 + \Gamma_2 \Psi) + J\mathscr {V}(z).
80+ 0 & = \xi(z, y) + \Gamma_5 z + \Gamma_6 y + \mathcal {V}(z),\\
81+ 0 & = \Gamma_3 + \Gamma_4 \Psi + (\Gamma_5 + \Gamma_6 \Psi)(\Gamma_1 + \Gamma_2 \Psi) + J\mathcal {V}(z).
8282\end{aligned}
8383```
8484
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