It has been shown in the econometric literature that consistent estimates of consumption-saving models with incomplete markets can be obtained from cross-section data if the model is solved and the observed agents' choices are compared to those predicted by the policy rules.Estimating this class...

The purpose of this paper is to explore and evaluate smooth approximation methods for value functions. These approximation methods are increasingly important in numerical dynamic programming since they allow researchers to solve models with a multitude of continuous state variables. In this...