Bellman Equation applied to Economics

This repository contains an implementation of a Bellman equation for an Economic model using four different methods:

1. value function iteration
2. linear interpolation
3. policy function iteration
4. matrix computation

The project aims to provide various approaches to solve the Bellman equation, allowing for a comparative analysis of their efficiency and accuracy.

Files

The repository consists of the following files:

• Problem: This file presents the model and outlines the objectives of the project. It provides a comprehensive description of the problem being addressed, including the variables, equations, and assumptions.
• Solution: The "Solution" file showcases the results obtained from solving the Bellman equation using different methods. It includes relevant figures and explanations of the findings.
• Code: This folder contains four Python files, each representing one of the methods employed to solve the Bellman equation.

Acknowledgments

This project was developed as part of the course in Dynamic Optimization at the Solvay Brussels School of Economics & Management, under the guidance and instruction of Thomas Demuynck.