Solving the Stochastic Growth Model by Policy-Function Iteration

Wilbur Coleman

Journal of Business & Economic Statistics, 1990, vol. 8, issue 1, 27-29

Abstract: This article describes a computer algorithm that solves the stochastic growth model by iterating on a fixed-point equation in the decision rule determining consumption as a function of the state variables. This algorithm does not discretize the state space, but rather it preserves the continuous domain of the capital stock and the productivity shock. The main advantge of this algorithm is that it is based on a Euler equation and thus it has a straightforward generalization to dynamic economies that cannot be solved by a central planner, such as a non-Pareto optimal competitive economy.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (115)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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: https://EconPapers.repec.org/RePEc:bes:jnlbes:v:8:y:1990:i:1:p:27-29

Ordering information: This journal article can be ordered from
http://www.amstat.org/publications/index.html

Access Statistics for this article

Journal of Business & Economic Statistics is currently edited by Jonathan H. Wright and Keisuke Hirano

More articles in Journal of Business & Economic Statistics from American Statistical Association
Bibliographic data for series maintained by Christopher F. Baum ().