Dynamic Programming Squared¶

Here we look at models in which a value function for one Bellman equation has as an argument the value function for another Bellman equation

Lectures¶

• Stackelberg Plans
  • Overview
  • Duopoly
  • The Stackelberg Problem
  • Stackelberg Plan
  • Recursive Representation of Stackelberg Plan
  • Computing the Stackelberg Plan
  • Exhibiting Time Inconsistency of Stackelberg Plan
  • Recursive Formulation of the Follower’s Problem
  • Markov Perfect Equilibrium
  • MPE vs. Stackelberg
• Ramsey Plans, Time Inconsistency, Sustainable Plans
  • Overview
  • The Model
  • Structure
  • Intertemporal Influences
  • Four Models of Government Policy
  • A Ramsey Planner
  • A Constrained-to-a-Constant-Growth-Rate Ramsey Government
  • Markov Perfect Governments
  • Equilibrium Outcomes for Three Models of Government Policy Making
  • A Fourth Model of Government Decision Making
  • Sustainable or Credible Plan
  • Whose Credible Plan is it?
  • Comparison of Equilibrium Values
  • Note on Dynamic Programming Squared
• Optimal Taxation with State-Contingent Debt
  • Overview
  • A Competitive Equilibrium with Distorting Taxes
  • Recursive Formulation of the Ramsey Problem
  • Examples
• Optimal Taxation without State-Contingent Debt
  • Overview
  • Competitive Equilibrium with Distorting Taxes
  • Recursive Version of AMSS Model
  • Examples
• Fluctuating Interest Rates Deliver Fiscal Insurance
  • Overview
  • Forces at Work
  • Logical Flow of Lecture
  • Example Economy
  • Reverse Engineering Strategy
  • Code for Reverse Engineering
  • Short Simulation for Reverse-engineered: Initial Debt
  • Long Simulation
  • BEGS Approximations of Limiting Debt and Convergence Rate
• Fiscal Risk and Government Debt
  • Overview
  • The Economy
  • Long Simulation
  • Asymptotic Mean and Rate of Convergence
• Competitive Equilibria of a Model of Chang
  • Overview
  • Setting
  • Competitive Equilibrium
  • Inventory of Objects in Play
  • Analysis
  • Calculating all Promise-Value Pairs in CE
  • Solving a Continuation Ramsey Planner’s Bellman Equation
• Credible Government Policies in a Model of Chang
  • Overview
  • The Setting
  • Calculating the Set of Sustainable Promise-Value Pairs