Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171479
Authors: 
Trimborn, Timo
Koch, Karl-Josef
Steger, Thomas M.
Year of Publication: 
2004
Series/Report no.: 
Economics Working Paper Series 04/35
Abstract: 
We propose the relaxation algorithm as a simple and powerful method for simulating the transition process in growth models. This method has a number of important advantages: (1) It can easily deal with a wide range of dynamic systems including multi-dimensional systems with stable eigenvalues that di.er drastically in magnitude. (2) The application of the procedure is fairly user friendly. The only input required consists of the dynamic system. (3) The variant of the relaxation algorithm we propose exploits in a natural manner the in.nite time horizon, which usually underlies optimal control problems in economics. Overall, it seems that the relaxation procedure can easily cope with a large number of problems which arise frequently in the context of macroeconomic dynamic models. As an illustrative application, we simulate the transition process of the well-known Jones (1995) model.
Subjects: 
saddlepoint problems
transitional dynamics
economic growth
multidimensional stable manifolds
JEL: 
C61
C63
O40
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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