Syllabus for 8185 Computational Economics: spring 2025

Heterogenous Agent Models

  • Review steady state computations in the standard model

    • Endogenous grid method
    • Histogram method

  • Transitions between steady states in the standard model

    • global methods
    • perturbational methods

  • Extend the standard model

    • Entrepreneurship (discrete choice)
    • Multiple assets (sweat capital or illiquid capital)

  • Aggregate shocks

    • Global and local methods
    • Stabilization policies

Additional Topics

  • Review continuous time methods

    • control problems using HJB equations
    • distributional dynamics using Kolmogrov Forward equations

  • Applications

    • Lucas-Hopenhayan Firm Dynamics

    • update to add capital that is indivisible, nonrentable and bilaterally traded

Structure of the Class

  • Will work through the main ideas using a simple case

    • Pseudo code on the board
    • Actual steps using some sample Julia code

  • Assignment: Apply the ideas to a slightly more advanced example

  • For example:

    • In the Aiyagari part, I will do the class using a model with inelastic labor supply
    • Assignments will have elastic labor supply