Dynamic Programming on a Quantum Annealer: Solving the RBC Model

Fernández-Villaverde, Jesús and Isaiah Hull
Authors registered in the RePEc Author Service: Jesus Fernandez-Villaverde

No 18190, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all states and generating candidate global solutions in milliseconds, irrespective of problem size. Using existing quantum hardware, we achieve an order-of-magnitude speed-up in solving the real business cycle model over benchmarks in the literature. We also provide a detailed introduction to quantum annealing and discuss its potential use for more challenging economic problems.

Keywords: Computational; methods (search for similar items in EconPapers)
JEL-codes: C63 C8 E37 (search for similar items in EconPapers)
Date: 2023-06
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Working Paper: Dynamic Programming on a Quantum Annealer: Solving the RBC Model (2023)
Working Paper: Dynamic Programming on a Quantum Annealer: Solving the RBC Model (2023)
Working Paper: Dynamic Programming on a Quantum Annealer: Solving the RBC Model (2023)
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