solve heterogeneous agent models with incomplete markets and aggregate uncertainty (Krusell and Smith (1998)). We document …

number of state variables and parameters, nonlinear dynamics, heterogeneity as well as aggregate uncertainty. … feasible. These simplifications include approximating the true nonlinear dynamics of the model, disregarding aggregate … uncertainty or assuming that all agents are identical. While relaxing these assumptions is well-known to give rise to complicated …