Create a time series from the simulated panel

Reference no: EM131265303

Use a value function iteration routine to solve the dynamic optimization problem with a firm when there are nonconvex adjustment costs. Suppose that there is a panel of such firms. Use the resulting policy functions to simulate the time series of aggregate investment. Then use a value function iteration routine to solve the dynamic optimization problem with a firm when there are quadratic adjustment costs. Create a time series from the simulated panel. How well can a quadratic adjustment cost model approximate the aggregate investment time series created by the model with nonconvex adjustment costs? Add in variations in the price of new capital into the optimization problem given in (8.21). How would you use this to study the impact of, say, an investment tax credit?

Reference no: EM131265303

Questions Cloud

Briefly compare and contrast theory e and theory o : Briefly compare and contrast Theory E and Theory O. Then, tell us how an organization can determine the most appropriate approach to take.

An example of direct labor cost : An example of direct labor cost is:

Apply the hayek and the mises readings to decision making : Give an example of how you might apply the Hayek and the Mises readings to decision making within your firm

Which qualifying customers can accumulate points and redeem : Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2016 it started a loyalty program through which qualifying customers can accumulate points and redeem t..

Create a time series from the simulated panel : Create a time series from the simulated panel. How well can a quadratic adjustment cost model approximate the aggregate investment time series created by the model with nonconvex adjustment costs? Add in variations in the price of new capital into..

How should counselors in private or a group practice setting : What special precautions or practices should a private practitioner adopt in order to minimize professional liability and ensure that their treatment of clients remains soundly within the boundaries of professional practice standards? How should c..

Market forces essay resources : Effective health care leaders recognize and respect the powerful relationship between market forces and ethical management challenges. Choose one of the market forces highlighted in Chapter 6 of your Ethics in Health Administration text: managed ca..

Discuss the implications of capital market imperfections : We return to this issue later in the chapter when we discuss the implications of capital market imperfections.

What are the characteristics of self-actualizing people : According to Maslow, what are the characteristics of self-actualizing people? Why are these characteristics important? What are the strengths of the humanistic theories in regard to their explanation of personality?

User Account

All Pages