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Dynamic Programming: An Introduction by Example

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  • Joachim Zietz

Abstract

Some basic dynamic programming techniques are introduced by way of example with the help of the computer algebra system Maple. The emphasis is on building confidence and intuition for the solution of dynamic problems in economics. To better integrate the material, the same examples are used to introduce different techniques. One covers the optimal extraction of a natural resource, another consumer utility maximization, and the final example solves a simple real business cycle model. Every example is accompanied by Maple computer code to make replication and extension easy.

Suggested Citation

  • Joachim Zietz, 2004. "Dynamic Programming: An Introduction by Example," Working Papers 200405, Middle Tennessee State University, Department of Economics and Finance.
    • Handle: RePEc:mts:wpaper:200405
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    File URL: http://capone.mtsu.edu/berc/working/Zietz-DP-1.pdf
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    References listed on IDEAS

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    1. Jerome Adda & Russell W. Cooper, 2003. "Dynamic Economics: Quantitative Methods and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262012014, December.
    2. Lars Ljungqvist & Thomas J. Sargent, 2004. "Recursive Macroeconomic Theory, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 026212274x, December.
    3. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    4. King, Ian, 2002. "A Simple Introduction to Dynamic Programming in Macroeconomic Models," Working Papers 190, Department of Economics, The University of Auckland.
    5. Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
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    2. Kuroki, Masanori, 2021. "Using Python and Google Colab to teach undergraduate microeconomic theory," International Review of Economics Education, Elsevier, vol. 38(C).
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    Keywords

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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate

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