Solving infinite horizon growth models with an environmental sector

David L. Kelly, Charles D. Kolstad

Research output: Contribution to journalArticle

7 Scopus citations

Abstract

This paper concerns computational models in environmental economics and policy, particularly so-called integrated assessment models. For the most part, such models are simply extensions of standard neoclassical growth models, extended by including the environment and pollution generation. We review the structure of integrated assessment models, distinguishing between finite horizon and infinite horizon models, both deterministic and stochastic. We present a new solution algorithm for infinite horizon integrated assessment models, relying on a neural net approximation of the value function within an iterative version of the Bellman equation.

Original languageEnglish (US)
Pages (from-to)217-231
Number of pages15
JournalComputational Economics
Volume18
Issue number2
DOIs
StatePublished - Oct 1 2001

Keywords

  • Climate change
  • Dynamic programming
  • Integrated assessment
  • Neural networks
  • Numerical solution methods

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Computer Science Applications

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