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Numerical Solution of Dynamic Non-Optimal Economies

  • Manuel Santos
  • Jianjun Miao

    ()

    (Economics Boston University)

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 Society for Economic Dynamics in its series 2005 Meeting Papers with number 266.

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Date of creation: 2005
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Handle: RePEc:red:sed005:266
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

Web page: http://www.EconomicDynamics.org/
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