Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/279250 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10500
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all states and generating candidate global solutions in milliseconds, irrespective of problem size. Using existing quantum hardware, we achieve an order-of-magnitude speed-up in solving the real business cycle model over benchmarks in the literature. We also provide a detailed introduction to quantum annealing and discuss its potential use for more challenging economic problems.
Subjects: 
computational methods
dynamic equilibrium economies
quantum computing
quantum annealing
JEL: 
C63
C80
E37
Document Type: 
Working Paper
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