This paper presents a novel two-way nested grid scheme that allows information to travel freely through the computational boundaries of the grid interface. The method tentatively assumes the pressure boundary conditions between subdomains, but uses a receding boundary approach to minimize the pressure errors. Initially, the domains overlap, but within a few time steps the overlap is eliminated by the receding boundaries, so repeated use of approximate boundary conditions is avoided. This prevents the accumulation of errors on the subdomain boundaries and, furthermore, decreases the transfer of errors to the rest of the domain by continuously discarding boundary data. To avoid continuous shrinking of the subdomains, the boundaries are reset to their original positions every few time steps. Successful applications of the method are presented for surface wave propagation, gravity currents and a combination of both surface and internal waves.

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