We show that the Value Function Iteration (VFI) algorithm has difficulties approximating models with jump discontinuities in policy functions. We find that VFI fails to accurately identify both the location and size of jump discontinuities while the Endogenous Grid Method (EGM) and the Finite...

This chapter reviews the microeconometrics literature on partial identification , focusing on the developments of the last thirty years. The topics presented illustrate that the available data combined with credible maintained assumptions may yield much information about a parameter of interest,...