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Numerical Solution of Dynamic Non-Optimal Economies

  • Junjian Miao

    ()

    (Department of Economics, Boston University)

  • Manuel Santos

    ()

    (Department of Economics, W. P. Carey School of Business)

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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Paper provided by Boston University - Department of Economics in its series Boston University - Department of Economics - Working Papers Series with number WP2005-003.

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Length: 28 pages
Date of creation: Jan 2005
Date of revision:
Handle: RePEc:bos:wpaper:wp2005-003
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  37. repec:cup:macdyn:v:6:y:2002:i:2:p:284-306 is not listed on IDEAS
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