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davidrpugh / numerical-methods

Graduate level course on numerical methods for economists
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CES calibration routine not respecting parameter restrictions #7

Open davidrpugh opened 10 years ago

davidrpugh commented 10 years ago

Care is needed to insure that steady state capital is finite when using CES utility. In particular the elasticity of substitution can not be too large. Fix probably requires using constrained optimization when minimixing NLLS to estimate alpha and sigma.

davidrpugh commented 10 years ago

Calibration routine for the Solow model now explicitly imposes non-negativity constraints on alpha and sigma as well as a third constraint that insures that steady state capital per effective worker is finite. Still need to port this updated routine to the Ramsey model.