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Title:Computation of equilibria in OLG models with many heterogeneous households PDF Logo
Authors:Rausch, Sebastian
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
overlapping generations
microsimulation
sequential recalibration
JEL:C68
C81
D61
D91
ISBN:978-3-86788-009-1
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des RWI
Ruhr Economic Papers, RWI

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