This paper applies the explicit aggregation (Xpa) algorithm developed by den Haan and Rendahl [2010. Solving the incomplete markets model with aggregate uncertainty using explicit aggregation. Journal of Economic Dynamics and Control, 69–78] to the heterogeneous–firm models of Khan and...

We review and evaluate methods previously adopted in the applied literature of adaptive learning in order to initialize agents' beliefs. Previous methods are classified into three broad classes: equilibrium-related, training sample-based, and estimation-based. We conduct several simulations...

We introduce a numerical algorithm for solving dynamic economic models that merges stochastic simulation and projection approaches: we use simulation to approximate the ergodic measure of the solution, we cover the support of the constructed ergodic measure with a fixed grid, and we use...