Using Adaptive Sparse Grids to Solve High-Dimensional Dynamic Models.

We present a flexible and scalable method for computing global solutions of high-dimensional stochastic dynamic models. Within a time iteration or value function iteration setup, we interpolate functions using an adaptive sparse grid algorithm. With increasing dimensions, sparse grids grow much more...

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Publicado en:Econometrica Vol. 85; no. 5; pp. 1575 - 1613
Autores principales: Brumm, Johannes, Scheidegger, Simon
Formato: Artículo
Publicado: Wiley-Blackwell Sep2017
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        10.3982/ECTA12216
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        atl: Using Adaptive Sparse Grids to Solve High-Dimensional Dynamic Models.
      aug:
        au:
          Brumm, Johannes
          Scheidegger, Simon
        affil:
          Department of Economics and Management, Karlsruhe Institute of Technology
          Department of Banking and Finance, University of Zurich
      su:
        Stochastic analysis
        Mathematical functions
        Algorithms
        Mathematical analysis
        Algebra
      sug:
        subj:
          Stochastic analysis
          Mathematical functions
          Algorithms
          Mathematical analysis
          Algebra
      keyword:
        Adaptive sparse grids
        high-performance computing
        international real business cycles
        menu costs
        occasionally binding constraints
        Adaptive sparse grids
        high-performance computing
        international real business cycles
        menu costs
        occasionally binding constraints
      ab: We present a flexible and scalable method for computing global solutions of high-dimensional stochastic dynamic models. Within a time iteration or value function iteration setup, we interpolate functions using an adaptive sparse grid algorithm. With increasing dimensions, sparse grids grow much more slowly than standard tensor product grids. Moreover, adaptivity adds a second layer of sparsity, as grid points are added only where they are most needed, for instance, in regions with steep gradients or at nondifferentiabilities. To further speed up the solution process, our implementation is fully hybrid parallel, combining distributed and shared memory parallelization paradigms, and thus permits an efficient use of high-performance computing architectures. To demonstrate the broad applicability of our method, we solve two very different types of dynamic models: first, high-dimensional international real business cycle models with capital adjustment costs and irreversible investment; second, multiproduct menu-cost models with temporary sales and economies of scope in price setting.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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