Numerical Solution of a Huggett Economy using a Finite Difference Method

Explanation of Algorithm

HJB equation, explicit method (Section 1.1): HJB_stateconstraint_explicit.m

HJB equation, implicit method (Section 1.2): HJB_stateconstraint_implicit.m

KFE Equation (Section 2, using matrix from HJB implicit method): huggett_partialeq.m

Plotting the asset supply function (Section 3.1): huggett_asset_supply.m

Finding the equilibrium interest rate (Section 3.2): huggett_equilibrium_iterate.m

HJB equation with diffusion, implicit method (section 4.1): HJB_diffusion_implicit.m

KFE Equation (Section 4.2, using HJB matrix): huggett_diffusion_partialeq.m

Transition Dynamics (Section 5): huggett_transition.m, huggett_initial.m, huggett_terminal.m



Additional Codes

No uncertainty, explicit method (Appendix A.1): HJB_simple.m, HJB_no_uncertainty_explicit.m

No uncertainty, implicit method (Appendix A.2): HJB_no_uncertainty_implicit.m

Solving the Neoclassical Growth Model (Appendix A.4): HJB_NGM.m

Stationary Equilibrium in an Aiyagari Model with diffusion (courtesy of Galo Nuno Barrau): aiyagari_diffusion_equilibrium.m



Codes without using Matlab's sparse matrix routines (slower):
HJB_stateconstraint_implicit_old.m
huggett_partialeq_old.m
huggett_asset_supply_old.m
huggett_equilibrium_iterate_old.m
HJB_diffusion_implicit_old.m
huggett_diffusion_partialeq_old.m
aiyagari_diffusion_equilibrium_old.m