Exact solution to nonlinear euler equations with stochastic interest rates

(eng) This paper presents an exact solution of a standard non linear forward looking rational expectations (NLRE) model where gaussien shocks are affecting interest rates in a non linear way. The result is used to assess how interest rates dynamics affects business investment. For the U.S. economy (1965-2001), there are clear evidence that the exact solution performs better than the usual linear approximation.