Resource title

Computation of equilibria in OLG models with many heterogeneous households

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Resource description

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.

Resource author

Sebastian Rausch, Thomas F. Rutherford

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Resource publish date

Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/26780

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