Coelho, Christiano Arrigoni; Pinto, Julio Cesar Costa - In: Economia 5 (2004) 3, pp. 155-181
This paper uses numerical methods to solve bank’s cost minimization problem. Following Clouse e Dow (2002), we model bank’s behavior using stochastic dynamic programming. We take account of institutional aspects of Brazilian regime that influence the bank’s choice of reserves in the end of...