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Numerical Solution of Dynamic Non-Optimal Economies

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  • Manuel Santos
  • Jianjun Miao

    ()
    (Economics Boston University)

Abstract

This paper presents a recursive method for the computation of sequential competitive equilibria in dynamic models with heterogeneous agents and market frictions. This computational method builds on a convergent operator defined over an expanded set of state variables for which a Markovian equilibrium solution is shown to exist. We apply this method to a stochastic growth economy and two financial economies.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2005 Meeting Papers with number 266.

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Date of creation: 2005
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Handle: RePEc:red:sed005:266

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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Keywords: Heterogenoeus agents; taxes; incomplete markets; recursive equilibria;

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References

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Cited by:
  1. Crettez, Bertrand & Morhaim, Lisa, 2012. "Existence of competitive equilibrium in a non-optimal one-sector economy without conditions on the distorted marginal product of capital," Mathematical Social Sciences, Elsevier, Elsevier, vol. 63(3), pages 197-206.

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