Stata Recursive problem, Bellman equation

[Jade03]

Hi all,

I need some help with estimating a Bellman equation for a optimal consumption in stata. Does anyone know how to do this?

- How do I define a dynamic discrete model choice?

 

[RobertoFerrer]

Try implementing value function iteration using Mata (Stata's matrix programming language), based on some problem/notes you have (or can find). For example, the following notes from Jerome Adda, use very basic Matlab and comment on the general algorithm:

www.ucl.ac.uk/~uctpjea/matlab.pdf

The problem to solve is the cake-eating problem. Run -help mata- for an introduction to Mata. You only need basic Mata to solve this.