The paper deals with the application of Minimum Weighted Residual Methods (MWR) in intertemporal optimizing models of endogenous economic growth. In the 1st part of the paper the basics of the MWR method are described. Attention is mainly concentrated on one special class of MWR methods: the...

This article presents a novel computational approach to solving models with both uninsurable idiosyncratic and aggregate risk that uses projection methods, simulation and perturbation. The approach is shown to be both as efficient and as accurate as existing methods on a model based on Krusell...

I investigate whether the popular Krusell and Smith algorithm used to solve heterogeneous-agent economies with aggregate uncertainty and incomplete markets is likely to be subject to multiple self-fulfilling equilibria. In a benchmark economy, the parameters representing the equilibrium...

Many economic models are completed by finding a parameter vector that optimizes a function f, a task that only be accomplished by iterating from a starting vector. Use of a generic iterative optimizer to carry out this task can waste enormous amounts of computation when applied to a class of...

The conventional lists of stylized facts are composed of sentences about the comovement of ordinary macroeconomic time-series and the business cycle. It is argued that these lists are incomplete because heterogeneous agent stylized facts are missing. But there is evidence about the heterogeneity...

An essential feature of Schumpeter’s business cycle theory is the attempt to explain the macrodynamics of an economy by means of innovative heterogeneous agents. It has been criticized for being theoretically inconsistent as well as for its lack of empirical confirmation. In particular, the...

This paper discusses how numerical techniques may be used to solve the simultaneous functional equations that arise in general dynamic stochastic games. Unlike the conventional linear-quadratic approach, our methods may be used to address general model specifications that may include...

The author explains how optimal-control problems can be solved with a common spreadsheet such as Microsoft Excel. He illustrates the method with several examples ranging from simple models to quite advanced topics. The method is intended to be beneficial to students and teachers working with...