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- W2738784046 abstract "Macroeconomic models with rational, heterogeneous agents offer the opportunity to studyboth individual and aggregate economic outcomes, and the interaction between the two. Solvingsuch models is diffcult: the non-trivial problem of solving a maximisation problem in thepresence of uncertainty is complicated by the need to determine model-consistent expectationsin an economy with a non-degenerate distribution of agents over states.This thesis provides both technical and mathematical tools which aid the economist inworking with such models. Chapter 1 provides an introduction to the topic and discusses theliterature.Chapter 2 presents software libraries which automate some of the steps, for example calculatingexpectations from policy functions. The economist can focus on the code whichimplements the model-specific solution to the optimisation problem. The libraries are shownto solve models far more efficiently than a comparable solution coded in Matlab.Chapter 3 introduces a new algorithm for calculating model-consistent expectations whichrelies on straightforward mathematics and a guess for the distribution of agents over states.The initial guess, the distribution obtained under constant aggregate conditions, yields goodresults. Multiple approaches for further improvement in the forecasting function are discussed.All solutions are computed using the libraries from chapter 2, and the algorithm isalso implemented as part of those libraries for use in other models.Chapter 4 discusses a model of the labour market with matching and large, heterogeneousforms. The forms experience idiosyncratic demand shocks and adjust their size in response.Steady state solutions are computed for different values of the exogenous tax rate and thetransition path demonstrates that, in contrast to the canonical matching model, employmentdoes not adjust instantaneously to changes in market conditions.Chapter 5 discusses some avenues for potential future research." @default.
- W2738784046 created "2017-07-31" @default.
- W2738784046 creator A5062461559 @default.
- W2738784046 date "2017-04-30" @default.
- W2738784046 modified "2023-09-22" @default.
- W2738784046 title "The art of the possible : tools and methods for solving models with substantial heterogeneity" @default.
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