In this paper we show that the approximation error of the optimal policy function in the stochastic dynamic programing problem using the policies defined by the Bellman contraction method is lower than a constant (which depends on the modulus of strong concavity of the one-period return...

A contractive method for computing stationary solutions of intertemporal equilibrium models is provided. The method is implemented using a contraction mapping derived from the first-order conditions. The deterministic dynamic programming problem is used to illustrate the method. Some numerical...

A contractive method for computing stationary solutions of intertemporal equilibrium models is provided. The method is implemented using a contraction mapping derived from the first-order conditions. The deterministic dynamic programming problem is used to illustrate the method. Some numerical...