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The market resources method for solving dynamic optimization problems

Ayşe Kabukçuoğlu Dur and Enrique Martínez García ()

No 274, Globalization Institute Working Papers from Federal Reserve Bank of Dallas

Abstract: We introduce the market resources method (MRM) for solving dynamic optimization problems. MRM extends Carroll?s (2006) endogenous grid point method (EGM) for problems with more than one control variable using policy function iteration. The MRM algorithm is simple to implement and provides advantages in terms of speed and accuracy over Howard?s policy improvement algorithm. Codes are available.

JEL-codes: C6 C61 C63 C68 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2016-06-01
New Economics Papers: this item is included in nep-cmp and nep-dge
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Working Paper: The Market Resources Method for Solving Dynamic Optimization Problems (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fip:feddgw:274

DOI: 10.24149/gwp274

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