This chapter is concerned with numerical simulation of dynamic economic models. We focus on some basic algorithms and study their accuracy and stability properties. This analysis is useful for an optimal implementation and testing of these procedures, as well as to evaluate their performance....

This paper analyzes the equilibrium dynamics of an endogenous growth model with physical and human capital in which leisure considerations have a direct effect on the utility function. Even in the absence of technological externalities our model may contain multiple balanced paths. These...

This paper studies the econometrics of computed dynamic models. Since these models generally lack a closed-form solution, economists approximate the policy functions of the agents in the model with numerical methods. But this implies that, instead of the exact likelihood function, the researcher...