Differential-difference equations in economics: On the numerical solution of vintage capital growth models
AbstractWe examine techniques for the analytical and numerical solution of state-dependent differential-difference equations. Such equations occur in the continuous-time modelling of vintage capital growth models, which form an important class of models in modern economic growth theory. The theoretical treatment of non-state-dependent differential-difference equations in economics was discussed by Benhabib and Rustichini (1991). In general, though, the state dependence of a model prevents its analytical solution in all but the simplest of cases. We review a numerical method for solving state dependent models, using simple examples to illustrate our discussion. In addition, we apply this numerical method to the Solow vintage capital growth model.
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Bibliographic InfoPaper provided by Université catholique de Louvain in its series Open Access publications from Université catholique de Louvain with number info:hdl:2078/94386.
Date of creation: 1997
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Publication status: Published in Journal of Economic Dynamics and Control (1997) v.21, p.347-362
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- Boucekkine, Raouf & Licandro, Omar & Paul, Christopher, 1997. "Differential-difference equations in economics: On the numerical solution of vintage capital growth models," Journal of Economic Dynamics and Control, Elsevier, vol. 21(2-3), pages 347-362.
- Raouf Boucekkine & Omar Licandro & Christopher Paul, . "Differential-Difference Equations in Economics: On the Numerical Solution of Vintage Capital Growth Models," Computing in Economics and Finance 1996 _036, Society for Computational Economics.
- Boucekkine, Raouf & Licandro, Omar & Paul, Christopher, . "Differential-difference equations in economics: on the numerical solution of vintage capital growth models," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/3951, Universidad Carlos III de Madrid.
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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