Computation of Equilibria in OLGModels with Many Heterogeneous Households

Sebastian Rausch and Thomas Rutherford ()

No 08/90, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: This paper develops a decomposition algorithm by which a market economy with many households may be solved through the computation of equilibria for a sequence of representative agent economies. The paper examines local and global convergence properties of the sequential recalibration (SR) algorithm. SR is then demonstrated to efficiently solve Auerbach- Kotlikoff OLG models with a large number of heterogeneous households. We approximate equilibria in OLG models by solving a sequence of related Ramsey optimal growth problems. This approach can provide improvements in both efficiency and robustness as compared with simultaneous solution methods.

Keywords: Computable general equilibrium; Overlapping generations; Microsimulation; Sequential recalibration (search for similar items in EconPapers)
JEL-codes: C68 C81 D61 D91 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2008-06
New Economics Papers: this item is included in nep-cmp and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Computation of Equilibria in OLG Models with Many Heterogeneous Households (2010)
Chapter: Computation of Equilibria in OLG Models with Many Heterogeneous Households (2009)
Working Paper: Computation of Equilibria in OLG Models with Many Heterogeneous Households (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:08-90

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