Fetching latest commit…
Cannot retrieve the latest commit at this time.
|Failed to load latest commit information.|
Simple Recursion for optimal consumption with infinite horizon Pierre-Carl Michaud, 2017 Example to learn how to solve for optimal consumption in a simple model with stochastic (AR(1)) earnings and infinite horizon. The rules are solved by discretizing the state-space and using the following tools: - Tauchen approximation of stochastic process - Golden section search - lineary intrapolation on a square root grid. A stata do-file is also provided to plot the consumption decision rules against cash-on-hand.