In this paper, different strategies to exploit the sparse structure in
the solution techniques for macroeconometric models with forward-look
ing variables are discussed. First, the stacked model is decomposed in
to recursive submodels without destroying its original block pattern.
Next, we concentrate on how to efficiently solve the sparse linear sys
tem in the Newton algorithm. In this frame, a multiple block diagonal
LU factorization and a sparse Gaussian elimination are presented. The
algorithms are compared by solving the country model for Japan in MULT
IMOD.