The Promes toolbox solves Dynamic Stochastic General Equilibrium (DSGE) models using projection methods. The toolbox offers the options to approximate the solution with:

• a spline
• a complete Chebyshev polynomial
• Smolyak’s algorithm (using code by Rafa Valero)
• a complete polynomial based on monomials

A simple standard RBC model can be solved in less than 0.05 seconds with each of the basis functions. Computation times do increase strongly with the complexity of the model, and a model with four continuous state variables and two policy variables can solved in a couple of seconds.

Promes is an acronym for Projection Method Solver. The Promes Toolbox is developed by Sijmen Duineveld. It is written for Matlab and requires the Optimization Toolbox. To use the toolbox the modeler has to carry out four tasks:

1. supply the model equations
2. set the interval where the policy function should be approximated
3. supply an initial guess for the policy function
4. select an algorithm

Based on these inputs the toolbox constructs the appropriate grid, and solves the policy function using the selected algorithm. There is also the option to evaluate the policy function, taking the state variables as input.

Further details are explained in the documentation. The toolbox and documentation include several examples on how to use the toolbox.

For older versions see the Github repository of the Promes toolbox.