Comparative Statics in Dynamic Programming Models with an Application to Job Search
AbstractThis paper presents a technique for qualitative comparative statics analysis in dynamic programming models. Let the value function v be the fixed point of a contraction mapping which depends differentially on some exogenous parameter theta. Then the derivative of v with respect to theta exists and is also the fixed point of a contraction mapping. Since this derivative is the fixed point of a contraction mapping its qualitative properties can be investigated using mathematical induction. This comparative statics methodology is illustrated with an application to a model of job search.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 172.
Length: 21 pages
Date of creation: Dec 1986
Date of revision: Aug 1991
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More information through EDIRC
Qualitative comparative statics analysis; dynamic programming; job search model;
Other versions of this item:
- Albrecht, James W. & Holmlund, Bertil & Lang, Harald, 1991. "Comparative statics in dynamic programming models with an application to job search," Journal of Economic Dynamics and Control, Elsevier, vol. 15(4), pages 755-769, October.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
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.:
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