Computational suite of models with heterogeneous agents II: Multi-country real business cycle models

This paper describes the second model considered in the computational suite project that compares the performance of different numerical algorithms. It is a multi-country model in which countries face different productivity shocks. Solving such models is a challenging numerical problem unless the number of countries is small. The solutions are functions of a large set of arguments and the functional forms are unknown. Moreover, the solution procedures have to deal with high-dimensional integration problems.