We use the Brock's (1982) asset pricing model to explore the equity premium puzzle that was raised by Mehra and Prescott (1985). In this paper, we have two basic points to make. First, there are parameterizations of the Brock model that have equity premia that are (1) more consistent with...

In this study we combine the dynamic programming method with the projection methods for solving stochastic growth models. One of the inconveniences of Judd's projection technique is that finding a good initial guess is not that easy or it is time costly especially when the dimensionality of the...