Multidimensional Transitional Dynamics: A Simple Numerical Procedure
Programs for the method proposed in the article. We propose the relaxation algorithm as a simple and powerful method for determining the transition process in growth models numerically. This method has a number of important advantages: (1) It can easily deal with a wide range of dynamic systems including stiff differential equations and systems giving rise to a continuum of stationary equilibria. (2) The application of the procedure is fairly user-friendly. The only input required consists of the dynamic system. (3) The variant of the relaxation algorithm we propose exploits in a natural manner the infinite time horizon, which usually underlies optimal control problems in economics. As an illustrative application, we compute the transition process of the models of Jones (1995) and Lucas (1988).
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Volume (Year): 12 (2008)
Issue (Month): 03 (June)
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