An algorithm for sequential solutions of dynamic CGE models with perfect foresight over an infinite numbers of periods
We describe a simple algorithm that permits the sequential (period-by-period) solution of large-scale dynamic CGE models with agents who have perfect foresight over an infinite number of periods. The algorithm requires neither any assumptions about behavior in a ?final? period nor that the base case economy be currently in steady state. We briefly illustrate the algorithm with an analysis of substituting a flat tax for all income taxes in the United States.
|Date of creation:||2006|
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