Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26323
Authors: 
Heer, Burkhard
Maußner, Alfred
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2278
Abstract: 
Value function iteration is one of the standard tools for the solution of the Ramsey model. We compare six different ways of value function iteration with regard to speed and precision. We find that value function iteration with cubic spline interpolation between grid points dominates the other methods in most cases. For the initialization of the value function over a fine grid, modified policy function iteration over a coarse grid and subsequent linear interpolation between the grid points provides a very efficient way to reduce computational time.
Subjects: 
value function iteration
policy function iteration
Howard's algorithm
acceleration
cubic interpolation
stochastic Ramsey model
JEL: 
C63
C68
E32
Document Type: 
Working Paper

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