Our work has been concerned with the numerical simulation of dynamic economies with heterogeneous agents and economic distortions. Recent research has drawn attention to inherent difficulties in the computation of competitive equilibria for these economies: A continuous Markovian solution may fail to exist, and some commonly used numerical algorithms may not deliver accurate approximations. We consider a reliable algorithm set forthin Fengetal.(2009), and discuss problems related to the existence and computation of Markovian equilibria, as well as convergence and accuracy properties. We offer new insights into numerical simulation.
|Original language||English (US)|
|Number of pages||9|
|Journal||Journal of the European Economic Association|
|State||Published - Jan 1 2010|
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)