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  • 标题:How to solve dynamic stochastic models computing expectations just once
  • 本地全文:下载
  • 作者:Judd, Kenneth L. ; Maliar, Lilia ; Maliar, Serguei
  • 期刊名称:Quantitative Economics
  • 电子版ISSN:1759-7331
  • 出版年度:2017
  • 卷号:8
  • 期号:3
  • 页码:851-893
  • DOI:10.3982/QE329
  • 语种:English
  • 出版社:John Wiley & Sons, Ltd.
  • 摘要:Abstract

    We introduce a computational technique— precomputation of integrals —that makes it possible to construct conditional expectation functions in dynamic stochastic models in the initial stage of a solution procedure. This technique is very general: it works for a broad class of approximating functions, including piecewise polynomials; it can be applied to both Bellman and Euler equations; and it is compatible with both continuous-state and discrete-state shocks. In the case of normally distributed shocks, the integrals can be constructed in a closed form. After the integrals are precomputed, we can solve stochastic models as if they were deterministic. We illustrate this technique using one- and multi-agent growth models with continuous-state shocks (and up to 60 state variables), as well as Aiyagari's (1994) model with discrete-state shocks. Precomputation of integrals saves programming efforts, reduces computational burden, and increases the accuracy of solutions. It is of special value in computationally intense applications. MATLAB codes are provided.

  • 关键词:Dynamic model ; precomputation ; numerical integration ; dynamic programming ; value function iteration ; Bellman equation ; Euler equation ; envelope condition method ; endogenous grid method ; Aiyagari model ; C61 ; C63 ; C68
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