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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. The authors 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. The authors document the performance of the methods in terms of computing time, implementation complexity and accuracy and they present some conclusions about their preferred approaches based on the reported evidence.

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File URL: http://www.econ.upenn.edu/~jesusfv/comparison.pdf
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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
Contact details of provider: Web page: http://www.dklevine.com/

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  11. S. Boragan Aruoba & Jesus Fernandez-Villaverde & Juan F. Rubio-Ramirez, 2003. "Comparing Solution Methods for Dynamic Equilibrium Economies," PIER Working Paper Archive 04-003, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
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