Dear Professor Pfeifer
I really appreciate your effort in this forum and hope that you can help me with my problem, too. Unfortunately, I wouldn’t find a similar question asked in the forum.
I am working with a multi sector Ramsey model and compare different policy scenarios using the perfect foresight solver. One of these policies makes use of non-linearities in the production function while the other does not. (If I understood correctly, the perfect foresight solver approximates the economy, doesn’t it?) I was wondering if you could suggest the one algorithm in the perfect foresight solver that takes care of such non-linearities the best? By this, I mean that the solver should not do a “first-order-approximation” of the economy or so.
I approach you with this question because a comparable model implemented in GAMS reveals “conceptually” different results than my runs in Dynare.
I am using the 4.5.6 version with perfectforesightsolver(Stack_solve_algo=0, solve_algo=1, Maxit=10).
Thank you for your help, I really appreciate it!