Document Type
Article
Publication Date
1-2014
Publication Title
International Economic Review
Volume
55
Issue
1
First Page
83
Last Page
110
Abstract
In this paper we propose a recursive equilibrium algorithm for the numerical simulation of nonoptimal dynamic economies. This algorithm builds upon a convergent operator over an expanded set of state variables. The fixed point of this operator defines the set of all Markovian equilibria. We study approximation properties of the operator. We also apply our recursive equilibrium algorithm to various models with heterogeneous agents, incomplete financial markets, endogenous and exogenous borrowing constraints, taxes, and money.
Recommended Citation
Feng, Zhigang; Miao, Jianjun; Peralta-Alva, Adrian; and Santos, Manuel S., "Numerical Simulation of Nonoptimal Dynamic Equilibrium Models" (2014). Economics Faculty Publications. 20.
https://digitalcommons.unomaha.edu/econrealestatefacpub/20
Comments
This is the peer reviewed version of the following article: Feng, Z., Miao, J., Peralta‐Alva, A., & Santos, M. S. (2014). Numerical simulation of nonoptimal dynamic equilibrium models. International Economic Review, 55(1), 83-110., which has been published in final form at http://onlinelibrary.wiley.com/wol1/doi/10.1111/iere.12042/abstract. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving.