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Computational Appendix to Entry, Exit, Embodied Technology, and Business Cycles

  • Jeffrey R. Campbell

    (Department of Economics, University of Chicago)

This appendix provides a detailed exposition of the computational method applied to the model of Campbell (1997). Heterogeneity in the production sector of that model implies that its prices and quantities are contnuous functions on the real line rather than scalars. The computational method used is an extension of standard log-linearization methods. It uses quadrature approximation of integrals to approximate a system of functional equations with a standard system of vector equations. Similar computational problems arise in other economic models which incorporate heterogeneity, such as that of Merz (1996), so the methods of this appendix may be of independent interest to other researchers.

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Paper provided by Review of Economic Dynamics in its series Technical Appendices with number campbell98.

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Length: 25 pages
Date of creation: Mar 1997
Date of revision:
Handle: RePEc:red:append:campbell98
Note: The original article was published in the Review of Economic Dynamics, volume 1 (1998), pages 371-408
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