Showing 1 - 10 of 1,861
This paper develops a dynamic programming method when the one-stage deviation principle in the sense of mechanism design literature doesn’t hold. The commonly used dynamic programming method is valid only if the one-stage deviation principle in the sense of mechanism design literature is...
Persistent link: https://www.econbiz.de/10012889686
This paper defines isomorphism for network formation that is not mathematically isomorphic. Once the pattern of network formation is characterized, one can test for (i) location fixed effects, (ii) heterogeneity, (iii) private information allowing for long-term contracts. The paper provides...
Persistent link: https://www.econbiz.de/10012892085
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...
Persistent link: https://www.econbiz.de/10014347831
We develop a behavioral macroeconomic model in which agents use simple but biased rules to forecast future output and inflation. This model generates endogenous waves of optimism and pessimism (Animal Spirits") that are generated by the correlation of biased beliefs. We contrast the dynamics of...
Persistent link: https://www.econbiz.de/10010272308
I distinguish two types of macroeconomic models. The first type are top-down models in which some or all agents are capable of understanding the whole picture and use this superior information to determine their optimal plans. The second type are bottom-up models in which all agents experience...
Persistent link: https://www.econbiz.de/10010272346
individuals use simple rules of thumb (heuristics) to forecast the future inflation and output gap. We compare this model with the …
Persistent link: https://www.econbiz.de/10010273776
in economic growth. Every macro-economic theory should attempt to explain these endemic business cycle movements. In this …
Persistent link: https://www.econbiz.de/10010274846
Value function iteration is one of the standard tools for the solution of the Ramsey model. We compare six different ways of value function iteration with regard to speed and precision. We find that value function iteration with cubic spline interpolation between grid points dominates the other...
Persistent link: https://www.econbiz.de/10010275799
We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in the damage coefficient. The model allows the full dynamic characterization of the optimal emission policies under uncertainty. The results, that imply prudent behavior due to...
Persistent link: https://www.econbiz.de/10010280838
The Dasgupta-Heal-Solow-Stiglitz model of capital accumulation and resource depletion poses the following sustainability problem: is it feasible to sustain indefinitely a level of consumption that is bounded away from zero? We provide a complete technological characterization of the...
Persistent link: https://www.econbiz.de/10010281450