Advanced Search
MyIDEAS: Login

Computation of Equilibria in OLG Models with Many Heterogeneous Households

Contents:

Author Info

  • Sebastian Rausch

    ()

  • Thomas Rutherford

Abstract

This paper develops a decomposition algorithm by which a market economy with many households may be solved through the computation of equilibria for a sequence of representative agent economies. The paper examines local and global convergence properties of the sequential recalibration (SR) algorithm. SR is then demonstrated to efficiently solve Auerbach-Kotlikoff OLG models with a large number of heterogeneous households. We approximate equilibria in OLG models by solving a sequence of related Ramsey optimal growth problems.This approach can provide improvements in both efficiency and robustness as compared with simultaneous solution-methods.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1007/s10614-010-9229-8
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Society for Computational Economics in its journal Computational Economics.

Volume (Year): 36 (2010)
Issue (Month): 2 (August)
Pages: 171-189

as in new window
Handle: RePEc:kap:compec:v:36:y:2010:i:2:p:171-189

Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100248
More information through EDIRC

Related research

Keywords: Computable general equilibrium; Overlapping generations; Microsimulation; Sequential recalibration; C68; C81; D61; D91;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robert M. Townsend & Kenichi Ueda, 2003. "Financial Deepening, Inequality, and Growth," IMF Working Papers 03/193, International Monetary Fund.
  2. T. J. Kehoe & D. K. Levine, 1982. "Comparative Statics and Perfect Foresight in Infinite Horizon Economies," Working papers 312, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. François Bourguignon & Amedeo Spadaro, 2006. "Microsimulation as a tool for evaluating redistribution policies," Journal of Economic Inequality, Springer, vol. 4(1), pages 77-106, April.
  4. Sebastian Rausch & Thomas Rutherford, 2010. "Computation of Equilibria in OLG Models with Many Heterogeneous Households," Computational Economics, Society for Computational Economics, vol. 36(2), pages 171-189, August.
  5. Jensen, Svend E Hougaard & Rutherford, Thomas F, 2002. " Distributional Effects of Fiscal Consolidation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(3), pages 471-93, September.
  6. Larch, Martin, 1993. "Dynamically Inefficient Equilibria in the Auerbach-Kotlikoff Model," Empirical Economics, Springer, vol. 18(1), pages 159-72.
  7. Arntz, Melanie & Boeters, Stefan & Gürtzgen, Nicole & Schubert, Stefanie, 2006. "Analysing welfare reform in a microsimulation-AGE model: the value of disaggregation," ZEW Discussion Papers 06-76, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Luc Savard, 2005. "Poverty and Inequality Analysis within a CGE Framework: A Comparative Analysis of the Representative Agent and Microsimulation Approaches," Development Policy Review, Overseas Development Institute, vol. 23(3), pages 313-331, 05.
  9. Fehr, Hans, 2000. " Pension Reform during the Demographic Transition," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 419-43, June.
  10. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
  11. Lau, Morten I. & Pahlke, Andreas & Rutherford, Thomas F., 2002. "Approximating infinite-horizon models in a complementarity format: A primer in dynamic general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 577-609, April.
  12. Rutherford, Thomas F. & Tarr, David G., 2008. "Poverty effects of Russia's WTO accession: Modeling "real" households with endogenous productivity effects," Journal of International Economics, Elsevier, vol. 75(1), pages 131-150, May.
  13. Herbert E. Scarf, 1959. "Some Examples of Global Instability of the Competitive Equilibrium," Cowles Foundation Discussion Papers 79, Cowles Foundation for Research in Economics, Yale University.
  14. Rutherford, Thomas & Tarr, David & Shepotylo, Oleksandr, 2005. "Poverty effects of Russia's WTO accession : modeling"real"households and endogenous productivity effects," Policy Research Working Paper Series 3473, The World Bank.
  15. Barbie Martin & Hagedorn Marcus & Kaul Ashok, 2004. "Assessing Aggregate Tests of Efficiency for Dynamic Economies," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-17, December.
  16. Rasmussen, Tobias N. & Rutherford, Thomas F., 2004. "Modeling overlapping generations in a complementarity format," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1383-1409, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Magnani R. & Mercenier J., 2008. "On Linking Microsimulation and Computable General Equilibrium Models Using Exact Aggregation of Heterogeneous Discrete-choice Making Agents," Working Papers ERMES 0809, ERMES, University Paris 2.
  2. Boeters, Stefan & Savard, Luc, 2013. "The Labor Market in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, Elsevier.
  3. Sebastian Rausch & Thomas F. Rutherford, 2008. "Computation of Equilibria in OLGModels with Many Heterogeneous Households," CER-ETH Economics working paper series 08/90, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  4. Jansson, Torbjorn & Bakker, Martha M. & Boitier, B. & Fougeyrollas, A. & Helming, John F.M. & van Meijl, Hans & Verkerk, P.J., 2008. "Linking models for land use analysis: experiences from the SENSOR project," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44169, European Association of Agricultural Economists.
  5. Peichl, Andreas, 2008. "The benefits of linking CGE and Microsimulation Models - Evidence from a Flat Tax analysis," FiFo Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 08-6, University of Cologne, FiFo Institute for Public Economics.
  6. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2010. "Trade and welfare: Does industrial organization matter?," Economics Letters, Elsevier, vol. 109(2), pages 85-87, November.
  7. Kathy Hibbard & Anthony Janetos, 2013. "The regional nature of global challenges: a need and strategy for integrated regional modeling," Climatic Change, Springer, vol. 118(3), pages 565-577, June.
  8. Melnikov, N.B. & O'Neill, B.C. & Dalton, M.G., 2012. "Accounting for household heterogeneity in general equilibrium economic growth models," Energy Economics, Elsevier, vol. 34(5), pages 1475-1483.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:kap:compec:v:36:y:2010:i:2:p:171-189. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.