Kotlikoff, Laurence; Hasanhodzic, Jasmina - Society for Economic Dynamics - SED - 2014
We calibrate and simulate 80, 40, and 20-period OLG models with aggregate shocks to assess generational risk. We overcome the curse of dimensionality by building on the Judd, Maliar, and Maliar algorithm, which limits a model's solution to its ergodic states, with no reliance on sparse grids,...