Resource title

Analytical and Numerical Solution of a Poisson RBC model

Resource image

image for OpenScout resource :: Analytical and Numerical Solution of a Poisson RBC model

Resource description

This paper analyses a RBC model in continuous time featuring deterministic incremental development of technology and stochastic fundamental inventions arriving according to a Poisson process. Other than in standard RBC models, shocks are uncorrelated, irregular and rather seldom. In two special cases analytical solutions are presented. In the general case a delay differential equation (DDE) has to be solved. Standard numerical solution methods fail, because the steady state is path dependent. A new solution based on a modified method of steps for DDEs provides not only approximations but also upper and lower bounds for optimal consumption path and steady state.

Resource author

Christoph Schlegel

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22709

Resource license

Adapt according to the presented license agreement and reference the original author.