# Tag Info

Accepted

• 1,829
Accepted

### What is the result of the Bellman Equation

...the result of applying sup operator is a NUMBER... Read it carefully. The equation is $$v(x_0) = \sup_{ \{x_t \}_{t \geq 1}} \cdots \quad (1)$$ This defines a function $v$, called the value ...
• 2,559

### Preference for consumption smoothing and actual smoothing

The argument relayed in the question as regards consumption smoothing is flawed. Consumption smoothing does not mean consumption equality over periods, but rather, tendency to avoid corner solutions, ...
• 31.8k

The Euler Equation typically refers to the interior optimal choice between consumption today and tomorrow (or some similar intertemporal choice). That is, it equalizes the marginal utility of ...
• 31
Accepted

• 42.1k
1 vote

### What is the difference between identification, calibration and estimation?

Identification = uniqueness of parameter value given data, estimation and calibration = finding parameter value with error and with no error according to some criterion that expresses the quality of ...
1 vote
Accepted

### Maximization problem FOC and Euler equation

Taking a variable as given comes from the assumptions of the model and cannot result from any optimisation problem (think simply that when a variable is taken as given it is treated as a constant in ...
• 862
1 vote
Accepted

### Expectational stability: adaptive learning of RE equilibria in dynamic systems

These are many questions. O.k., so let's go step by step: (Q1) What is a mapping actually? A map is just another term for a function. Here, every "law of motion", the actual one (ALM) and the ...
• 4,557

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