Perturbation Solution Methods for Economic Growth Models
Economic growth is one of the most important macroeconomic phenomena. With economic growth comes the possibility of improving the living standards of all in a society. Economic growth has been studied by all generations of economists. Economists have used optimal control theory and dynamic programming to formalize the study of economic growth, yielding many important insights. Unfortunately, most of these methods are generally qualitative and do not yield the kind of precise quantitative solutions necessary for econometric analysis and policy analysis.
KeywordsCapital Stock Perturbation Method Bellman Equation Perturbation Solution Policy Function
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