SOLVING DYNAMIC MODELS WITH AGGREGATE SHOCKS AND HETEROGENEOUS AGENTS

Wouter J. Den Haan
Authors registered in the RePEc Author Service: Wouter Denhaan ()

Macroeconomic Dynamics, 1997, vol. 1, issue 02, pages 355-386

Abstract: I develop an algorithm for solving dynamic models in which individualdecision rules and the cross-sectional distribution of agents characteristics influence each other. To illustrate the algorithm, Isolve an endowment economy with incomplete markets, a continuum ofheterogeneous agents, and aggregate shocks. The key innovation of thealgorithm is to parameterize the (cross-sectional) density with aflexible functional form, which makes it possible to avoid simulationtechniques. The paper shows how to check for accuracy and establisheslinks between the properties of the incomplete-markets economy andthe aspects involved in obtaining a numerical solution.

Date: 1997
References: Add references at CitEc
Citations View citations in EconPapers (32) Track citations by RSS feed

Downloads: (external link)
http://journals.cambridge.org/abstract_S1365100597003040 link to article abstract page (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cup:macdyn:v:1:y:1997:i:02:p:355-386_00

Access Statistics for this article

More articles in Macroeconomic Dynamics from Cambridge University Press
Address: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK
Series data maintained by Keith Waters ().