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A computational general equilibrium model with vintage capital

✍ Scribed by Loı̈c Cadiou; Stéphane Dées; Jean-Pierre Laffargue

Publisher
Elsevier Science
Year
2003
Tongue
English
Weight
352 KB
Volume
27
Category
Article
ISSN
0165-1889

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✦ Synopsis

This paper presents a vintage capital model assuming putty-clay investment and perfect foresight. The model is written in discrete time and is simulated by using a second order relaxation algorithm. By computing the eigenvalues of the dynamic system, we have checked the conditions of existence and uniqueness of a solution (Blanchard and Kahn's conditions) and identiÿed the echo e ect that characterizes vintage capital models and the related dynamics of creation and destruction. By calibrating the model on French data, it has been proved useful to explain the medium-term movements in the distribution of income in France during the last three decades.

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Numerical solution by iterative methods
Numerical solution by iterative methods of a class of vintage capital models
✍ Raouf Boucekkine; Marc Germain; Omar Licandro; Alphonse Magnus 📂 Article 📅 2001 🏛 Elsevier Science 🌐 English ⚖ 156 KB

We build up an iterative numerical procedure in order to solve vintage capital growth models with nonlinear utility functions and Leontie! technologies, a class of models intensively used in the literature since the early 1990s. The numerical procedure is of the relaxation type and uses a step-by-st