Krylov subspace methods have proven to be powerful methods for solving sparse linear systems arising in several engineering problems. More recently, these methods have been successfully applied in computational economics, for instance in the solution of forward-looking macroeconometric models...

This paper studies the dynamics of labor demand at the firm level. Recent studies emphasize the importance of non-convex components in the structure of hiring and firing costs in the form of either fixed or linear adjustment costs. Building from Cooper al. (2005) model and Rota (2004)...

Using standard preferences for asset pricing has not been very successful to match asset price characteristics such as the risk-free interest rate, equity premium and the Sharpe ratio to time series data. Behavioral finance has recently proposed more realistic preferences such as preferences...

We consider a finite horizon discrete time model for bond market where bond prices are functions of the short rate process. We use a variant of the Ito's formula to decompose the bond price process into unique drift and martingale processes. We then apply the Girsanov's Theorem for finding a...

We introduce a general framework to value pilot project investments under the presence of both, market and technical uncertainty. The model generalizes different settings introduced previously in the literature. By distinguishing between the pilot and the commercial stages of the project we are...

Solow and Hahn proposed an overlapping generations model in 1995 with which to criticize rational expectations. The agents have perfect foresight, but are subjected to an unanticipated shock in the population. The authors showed that the economy couldn't return to the steady state without...