Abstract
Projection methods are deemed necessary to accurately solve various variants of the Diamond–Mortensen–Pissarides model used in business cycle research. This paper argues that hybrid perturbation, once combined with a non-linear change of variable, can provide an alternative, producing accurate solutions while retaining most of the simplicity of standard perturbation: Applying the method to the Hagedorn and Manovskii (2008) model, it delivers high accuracy and nearly identical business cycle moments as recent projection approaches.