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Solution Methods in Transition Dynamics

  • Terry L. Roe
  • D. Şirin Saracoğlu
  • Rodney B.W. Smith
Chapter

Abstract

This chapter introduces two numerical methods for solving recursive dynamic optimization problems in deterministic form: the time elimination method by Mulligan and Sala-i-Martin (1991, 1993) and the backward integration method by Brunner and Strulik (2002). Both procedures involve solving for transitional dynamics backwardly from a given initial value. Both methods improve upon the common procedure known as “shooting” (e.g. Judd, 1998, Chapter 10). Various other methods are also available, but they are not discussed here.

Keywords

Solution Method Transition Dynamics Negative Eigenvalue Policy Function Stable Equilibrium Point 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag New York 2010

Authors and Affiliations

  • Terry L. Roe
    • 1
  • D. Şirin Saracoğlu
    • 2
  • Rodney B.W. Smith
    • 1
  1. 1.Department of Applied EconomicsUniversity of MinnesotaSt. PaulUSA
  2. 2.Department of EconomicsMiddle East Technical University (METU)AnkaraTurkey

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