DEEPECON
Updated 15 days ago
DeepEcon is an AI-based toolbox for analyzing dynamic economic models with a large number of heterogeneous agents. Each agent solves a second order stochastic difference equation, and the individual solutions are restricted to satisfy certain aggregate equilibrium conditions. The solution is to be given in the form of the Markov decision process. The economy's state space is the entire distribution of the individual quantities, so that the model suffers from a severe curse of dimensionality. This class of problems is analyzed in economics by approximating the state space with a finite set of aggregate moments, however, such approximations have important limitations.