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Chapter 5 Numerical solution of dynamic economic models
Book chapter

Chapter 5 Numerical solution of dynamic economic models

Manuel S Santos
Handbook of Macroeconomics, pp.311-386
Elsevier B.V
1999

Abstract

approximation error dynamic economic model Euler equation numerical algorithm numerical solution policy function value function
This chapter is concerned with numerical simulation of dynamic economic models. We focus on some basic algorithms and assess their accuracy and stability properties. This analysis is useful for an optimal implementation and testing of these procedures, as well as to evaluate their performance. Several examples are provided in order to illustrate the functioning and efficiency of these algorithms.

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