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Contribution Details
| Type | Conference or Workshop Paper |
| Scope | Discipline-based scholarship |
| Published in Proceedings | Yes |
| Title | Verifying competitive equilibria in dynamic economies |
| Organization Unit | |
| Authors |
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| Presentation Type | paper |
| Item Subtype | Original Work |
| Refereed | No |
| Status | Published in final form |
| Language |
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| Event Title | CRETA (Center for Research in Economic Theory and Application) Summer Conference 2008 |
| Event Type | conference |
| Event Location | Warwick, GB |
| Event Start Date | September 1 - 2008 |
| Event End Date | September 4 - 2008 |
| Publisher | CRETA |
| Abstract Text | In this paper I derive a sucient condition for a numeri-cally computed -equilibrium of a dynamic stochastic economy with heterogeneous agents to be close to an exact equilibrium. If the economic fundamentals are semi-algebraic, one can verify computationally whether this condition holds. The condition can be interpreted economically as a robustness requirement on the set of -equilibria that form a neighborhood of the computed approximation. I use this method of 'self-validating computation' to prove that in realistically calibrated stochastic overlapping generation models, competitive equilibria can often be extremely well approximated by cubic functions, mapping the current shock and the beginning-of-period wealth-distribution to current endogenous variables. |
| Related URLs | |
| Digital Object Identifier | 10.1093/restud/rdr005 |
| Other Identification Number | merlin-id:522 |
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| Additional Information | Title of the conference-presentation: Robust equilibria in dynamic economies |