Abstract
Abstract The development and use of forward-looking macromodels in policy making institutions has proceeded at a much slower pace than what was predicted in the early 1980s. An important reason for this is that researchers have not had access to robust and efficient solution techniques for solving nonlinear forward-looking models. This paper discusses the properties of alternative algorithms for solving MULTIMOD, the IMF's multicountry model of the world economy. Relative to traditional first-order algorithms in use today, we find that Newton-based techniques are considerably faster and much less prone to simulation failure.
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