We introduce a technique called "precomputation of integrals" that makes it possible to compute conditional expectations in dynamic stochastic models in the initial stage of the solution procedure. This technique can be applied to any set of equations that contains conditional expectations, in...

"In conventional stochastic simulation algorithms, Monte Carlo integration and curve fitting are merged together and implemented by means of regression. We perform a decomposition of the solution error and show that regression does a good job in curve fitting but a poor job in integration, which...

This chapter examines local and global approximation methods that have been used or have potential future value in economic and econometric analysis. The chapter presents the related projection method for solving operator equations and illustrates its application to dynamic economic analysis,...