Recursive Methods for Computing Equilibria of General Equilibrium Dynamic Stackelberg Games

Steven Ambler () and Alain Paquet ()

No 25, Cahiers de recherche CREFE / CREFE Working Papers from CREFE, Université du Québec à Montréal

Abstract: We extend the Hansen and Prescott (1991) method for the numerical computation of equilibria of dynamic business cycle models in which there are two sets of agents who play a dynamic Stackelberg game. Such models have application to analysis of issues of optimal government policy in which the government plays the role of Stackelberg leader and a representative private agent is the follower. We show how to derive time-consistent policy rules for the Stackelberg leader, and we consider an application of the methodology to the determination of optimal government spending in perfectly competitive growth model.

Nous généralisons la méthode Hansen et Prescott (1991) pour calculer numériquement l'équilibre de modèles du cycle économique, au cas où deux groupes d'agents interagissent dans un jeu de Stackelberg dynamique. Cette généralisation trouve application dans l'analyse de politiques optimales lorsque e gouvernement est le leader et l'agent privé représentatif est le suiveur. Nous montrons comment dériver des règles de rétroaction de politique économique qui sont intertemporellement cohérentes et nous appliquons la méthodologie à la détermination du niveau optimal de dépenses publiques de consommation dans un modèle de croissance néo- classique.

Keywords: business cycles; dynamic games; optimal policy (search for similar items in EconPapers)
JEL-codes: E32 E62 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1994-05
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Published in Economic Modelling, 14, pages 155-173, 1997

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Journal Article: Recursive methods for computing equilibria of general equilibrium dynamic Stackelberg games (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:cre:crefwp:25

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