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dcdflib.f
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README
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infinite.f90
readrules.do

README

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.