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Comparing Solution Methods for Dynamic Equilibrium Economies

  • S. B. Aruoba
  • Jesús Fernández-Villaverde
  • Juan F. Rubio-Ramirez

This paper compares solution methods for dynamic equilibrium economies. We compute and simulate the stochastic neoclassical growth model with leisure choice using Undetermined Coefficients in levels and in logs, Finite Elements, Chebyshev Polynomials, Second and Fifth Order Perturbations and Value Function Iteration for several calibrations. We document the performance of the methods in terms of computing time, implementation complexity and accuracy and we present some conclusions about our preferred approaches based on the reported evidence.

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Paper provided by UCLA Department of Economics in its series Levine's Bibliography with number 122247000000000855.

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Date of creation: 17 Jan 2005
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Handle: RePEc:cla:levrem:122247000000000855
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