Two half-days Workshop on using VFI Toolkit taught at LSE in 2025, at 1-5pm on Tues 6th & 1-5pm on Wed 7th of May. Workshop introduces VFI Toolkit and shows how to solve a wide variety of Life-Cycle and OLG models. Emphasis is on getting going with codes and understanding what advanced features exist. We will solve examples of everything listed below.

Day 1: Life-Cycle Models

• Part 1: Solve and analyse Basic Life-Cycle Models
  • Decision variables, endogenous state, markov exogenous state.
  • Stationary distribution of agents.
  • Analyse model looking at stats and age-conditional stats.
• Part 2: Standard Life-Cycle Models
  • i.i.d exogenous state
  • semi-exogenous state
  • Permanent types
• Part 3: Advanced Life-Cycle Models
  • Alternative preferences: Epstein-Zin preferences, Quasi-Hyperbolic discounting, Gul-Pesendorfer preferences, Loss Aversion, Ambiguity Aversion.
  • Other endogenous states: two endogenous states, human capital, uncertain human capital, portfolio-choice.
  • Calibration and GMM Estimation.

Day 2: OLG models – Stationary general equilibrium and Transition paths.

• Part 4: OLG Models
  • Stationary general equilbrium
  • Government: Taxes and transfers
• Part 5: Transition path in OLG Models
  • General eqm transition paths
  • Demographic transition