Lecture 5: Dynamic Programming

We introduced the Dynamic Programming technique by means of the well known cake eating problem. We showed probably the simplest way to solve for the optimal decision rule, on a discrete grid. We also showed that this can lead to really poor results, so implementation details matter here. We introduced uncertainty and we looked at an Euler Equation solver for a consumption savings problem.

Topic	Notebook
Dynamic Programming 1	download notebook
Dynamic Programming 2	download notebook
Endogenous Grid Method (EGM)	download notebook
The Shimer-Smith Model	download notebook
The Ayiagari Model	download notebook