This chapter is concerned with numerical simulation of dynamic economic models. We focus on some basic algorithms and … assess their accuracy and stability properties. This analysis is useful for an optimal implementation and testing of these …

approximating functions (Smolyak, stochastic simulation, and ε -distinguishable set grids), accurate low-cost monomial integration … condition methods that reduce the cost and increase accuracy of value function iteration. Third, we show precomputation … techniques that increase the accuracy of perturbation methods: a change of variables and a hybrid of local and global solutions …

done by evaluating speed and accuracy. We find that HYBGM and ENDGM both dominate EXOGM. In an infinite horizon model …

done by evaluating speed and accuracy by using a specific model with two endogenous state variables. We find that HYBGM and …

In Longstaff and Schwartz (2001) a method for American option pricing using simulation and regression is suggested, and … since then the method has rapidly gained importance. However, the idea of using regression and simulation for American …