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|Title:||Computation of Equilibria in OLG Models with Many Heterogeneous Households |
Rutherford, Thomas F.
|Issue Date:||2007 |
|Series/Report no.:||Ruhr economic papers 15|
|Abstract:||This paper develops a decomposition algorithm by which a market economy with many households may be solved through the computation of equilibria for a sequence of representative agent economies. The paper examines local and global convergence properties of the sequential recalibration (SR) algorithm. SR is then demonstrated to efficiently solve Auerbach-Kotlikoff OLG models with a large number of heterogeneous households. We approximate equilibria in OLG models by solving a sequence of related Ramsey optimal growth problems.This approach can provide improvements in both efficiency and robustness as compared with simultaneous solution-methods.|
|Subjects:||Computable general equilibrium|
|Document Type:||Working Paper|
|Appears in Collections:||Ruhr Economic Papers, RWI|
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