Winschel, Viktor; Krätzig, Markus - Sonderforschungsbereich 649: Ökonomisches Risiko, … - 2008
;t;ln;t;in;tgNn=1g1t=0
U = E0
1X
t=0
NX
n=1
fltUn;t
for n = 1;:::;N countries and all future periods t ‚ 0. The welfare function
U is a … 2 X Rdx, expected variables zt 2 Z Rdz and stochastic shocks et+1,
which are usually specifled to follow a normal ….
Our solution approach is to solve for the policy functions x⁄ : Rds ! Rdx
that map states into policies. The algorithm is …