# Uncategorized

**URL:** https://discourse.vfitoolkit.com/c/uncategorized/1.md

[Latest](https://discourse.vfitoolkit.com/latest.md) · [Categories](https://discourse.vfitoolkit.com/categories.md)

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## [Welcome to Discourse](https://discourse.vfitoolkit.com/t/welcome-to-discourse/8)

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**Author:** [@system](https://discourse.vfitoolkit.com/u/system)\
**Replies:** 0\
**Last updated:** [August 31, 2017, 8:27am UTC](https://discourse.vfitoolkit.com/t/welcome-to-discourse/8 "2017-08-31T08:27:34Z")

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Welcome to the Forum for VFI Toolkit. Feel free to ask for help with codes, feature requests, or any other questions.

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## [Entrepreneurial-Choice models: Kitao (2008) and Bruggemann (2021)](https://discourse.vfitoolkit.com/t/entrepreneurial-choice-models-kitao-2008-and-bruggemann-2021/715)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 2\
**Last updated:** [October 3, 2026, 10:35pm UTC](https://discourse.vfitoolkit.com/t/entrepreneurial-choice-models-kitao-2008-and-bruggemann-2021/715 "2026-10-03T22:35:36Z")

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‘Entrepreneurial-Choice’ models feature infinitely-lived households who decide whether to be an Entrepreneur or a Worker based on their relative productivity in each of the two, as well as their assets. Entrepreneurs fac…

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## [Replication: Huggett & Ventura (2000)](https://discourse.vfitoolkit.com/t/replication-huggett-ventura-2000/717)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [October 3, 2026, 2:00am UTC](https://discourse.vfitoolkit.com/t/replication-huggett-ventura-2000/717 "2026-10-03T02:00:28Z")

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Full replication of Huggett & Ventura (2000) - Understanding why high income households save more than low income households You can find the replication codes and pdf summary here. Basic takeaway is that everything re…

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## [Life-Cycle Model 43: Earnings-Indexed Pensions (experienceassetz)](https://discourse.vfitoolkit.com/t/life-cycle-model-43-earnings-indexed-pensions-experienceassetz/716)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [October 2, 2026, 6:17am UTC](https://discourse.vfitoolkit.com/t/life-cycle-model-43-earnings-indexed-pensions-experienceassetz/716 "2026-10-02T06:17:42Z")

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Just added a new Life-Cycle Model 43 to the Intro to Life-Cycle Models. It shows how to use experienceassetz, which is aprime(d,a,z). This is applied to keep track of average earnings, to which pensions are then indexed.…

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## [OLG models with QH discounting to examine intergenerational investments and returns](https://discourse.vfitoolkit.com/t/olg-models-with-qh-discounting-to-examine-intergenerational-investments-and-returns/712)

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**Author:** [@MichaelTiemann](https://discourse.vfitoolkit.com/u/MichaelTiemann)\
**Replies:** 1\
**Last updated:** [October 2, 2026, 3:43am UTC](https://discourse.vfitoolkit.com/t/olg-models-with-qh-discounting-to-examine-intergenerational-investments-and-returns/712 "2026-10-02T03:43:27Z")

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I came across this paper titled “Hyperbolic discounting in an intergenerational model with altruistic parents”. It is close to, but not exactly what I’m looking for, which is a quasihyperbolic discounting model that bui…

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## [Homotopy Methods for solving General Eqm](https://discourse.vfitoolkit.com/t/homotopy-methods-for-solving-general-eqm/713)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [September 28, 2026, 8:26am UTC](https://discourse.vfitoolkit.com/t/homotopy-methods-for-solving-general-eqm/713 "2026-09-28T08:26:09Z")

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A friend told me they were using a Homotopy method to find the stationary general eqm of an OLG model. I had no idea what that was, so I read Chapter 5 of Judd’s Numerical Methods in Economics and Eaves & Schmedders (199…

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## [LeanEconomics: Building Economic Theory in Lean](https://discourse.vfitoolkit.com/t/leaneconomics-building-economic-theory-in-lean/709)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 5\
**Last updated:** [September 20, 2026, 8:35pm UTC](https://discourse.vfitoolkit.com/t/leaneconomics-building-economic-theory-in-lean/709 "2026-09-20T20:35:46Z")

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I’ve started playing around with using Lean for Macroeconomics. You should join in :wink: I built Lean proofs of the existence of stationary general eqm in both the Aiyagari and Huggett models. I build proof of uniquene…

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## [Replication: Guvenen (2007) - Learning Your Earnings: Are Labor Income Shocks Really Very Persistent?](https://discourse.vfitoolkit.com/t/replication-guvenen-2007-learning-your-earnings-are-labor-income-shocks-really-very-persistent/710)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [September 19, 2026, 12:31am UTC](https://discourse.vfitoolkit.com/t/replication-guvenen-2007-learning-your-earnings-are-labor-income-shocks-really-very-persistent/710 "2026-09-19T00:31:52Z")

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Here is a replication of Guvenen (2007). G2007 makes two main claims: i) HIP beats RIP ii) Learning improves HIP based on three empirical facts about how age-conditional var(consumption) increase with age, and how it…

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## [Expected Value Fn](https://discourse.vfitoolkit.com/t/expected-value-fn/707)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 1\
**Last updated:** [September 18, 2026, 11:55pm UTC](https://discourse.vfitoolkit.com/t/expected-value-fn/707 "2026-09-18T23:55:40Z")

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Info for those interested in toolkit internals. Previously, the toolkit always computed the expected next period value fn as EV=V.\*pi\_z. I have changed this to use EV=V\*pi\_z. The impact is that small models will be 1%…

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## [Adding new decisions to LifeCycleModel35semiz](https://discourse.vfitoolkit.com/t/adding-new-decisions-to-lifecyclemodel35semiz/584)

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**Author:** [@MichaelTiemann](https://discourse.vfitoolkit.com/u/MichaelTiemann)\
**Replies:** 24\
**Last updated:** [September 18, 2026, 8:20pm UTC](https://discourse.vfitoolkit.com/t/adding-new-decisions-to-lifecyclemodel35semiz/584 "2026-09-18T20:20:45Z")

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I’m interested in adding a decision to install rooftop solar on top of a house in LifeCycleModel35semiz. I’ve added installpv as a binary choice and solarpv as a scalable generation asset (scalable from 0 to 30 kWh). n…

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## [Missed discretizeARpwGM\_FarmerToda](https://discourse.vfitoolkit.com/t/missed-discretizearpwgm-farmertoda/439)

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**Author:** [@AlexP](https://discourse.vfitoolkit.com/u/AlexP)\
**Replies:** 3\
**Last updated:** [September 18, 2026, 4:26am UTC](https://discourse.vfitoolkit.com/t/missed-discretizearpwgm-farmertoda/439 "2026-09-18T04:26:33Z")

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Was trying to look into discretization with multiple lags, but found no file. Could you please give any draft of this function (and maybe tips of how to proceed)? Would be happy to learn any workarounds with existing cle…

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## [Bug in SimPanelValues\_TransPath\_InfHorz](https://discourse.vfitoolkit.com/t/bug-in-simpanelvalues-transpath-infhorz/691)

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**Author:** [@aledinola](https://discourse.vfitoolkit.com/u/aledinola)\
**Replies:** 32\
**Last updated:** [September 16, 2026, 7:58pm UTC](https://discourse.vfitoolkit.com/t/bug-in-simpanelvalues-transpath-infhorz/691 "2026-09-16T19:58:40Z")

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While testing GuerrieriLorenzoni2017\_Example.m, MATLAB fails at the first call to SimPanelValues\_TransPath\_InfHorz. Error: Unrecognized function or variable 'transpathoptions'. Error in SimPanelValues\_TransPath\_InfHor…

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## [Discretization Methods](https://discourse.vfitoolkit.com/t/discretization-methods/708)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [September 16, 2026, 4:50am UTC](https://discourse.vfitoolkit.com/t/discretization-methods/708 "2026-09-16T04:50:03Z")

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Built a large test bank for the discretization methods. Tests all sorts of things, and included cleaning up some minor aspects and implementing some missing options. As part of this I eliminated the dependence on Matla…

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## [Constrain General Eqm Parameters](https://discourse.vfitoolkit.com/t/constrain-general-eqm-parameters/392)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 15\
**Last updated:** [September 12, 2026, 7:44am UTC](https://discourse.vfitoolkit.com/t/constrain-general-eqm-parameters/392 "2026-09-12T07:44:25Z")

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You can now constrain the general eqm parameters (the ones named in GEPriceParamNames). This works for both infinite and finite horizon models (and is now explained in an Appendix in the Intro to OLG Models, following is…

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## [Endogenous labor solved with bisection inside the return function](https://discourse.vfitoolkit.com/t/endogenous-labor-solved-with-bisection-inside-the-return-function/704)

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**Author:** [@aledinola](https://discourse.vfitoolkit.com/u/aledinola)\
**Replies:** 1\
**Last updated:** [September 10, 2026, 9:56pm UTC](https://discourse.vfitoolkit.com/t/endogenous-labor-solved-with-bisection-inside-the-return-function/704 "2026-09-10T21:56:04Z")

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Suppose you have an Aiyagari model with endogenous labor supply. Under some restrictions on preferences, one might be able to solve for optimal labor conditional on (a’,a,z) in closed form. Then one could easily write th…

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## [Heterogenous agents...in SPACE!](https://discourse.vfitoolkit.com/t/heterogenous-agents-in-space/703)

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**Author:** [@MichaelTiemann](https://discourse.vfitoolkit.com/u/MichaelTiemann)\
**Replies:** 9\
**Last updated:** [September 10, 2026, 8:01pm UTC](https://discourse.vfitoolkit.com/t/heterogenous-agents-in-space/703 "2026-09-10T20:01:23Z")

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I don’t want to clutter Aiyagari example, Transition - #24 by MichaelTiemann with topics too far off-piste from the core transition path topic, so here’s a new thread. I spent yesterday with “Geography vs Income: The He…

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## [Arellano 2008 replication](https://discourse.vfitoolkit.com/t/arellano-2008-replication/702)

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**Author:** [@kamecon](https://discourse.vfitoolkit.com/u/kamecon)\
**Replies:** 3\
**Last updated:** [September 8, 2026, 7:51pm UTC](https://discourse.vfitoolkit.com/t/arellano-2008-replication/702 "2026-09-08T19:51:50Z")

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Hi! I was under the impression that there was a replication of Arellano’s (2008) Default Risk and Income Fluctuations in Emerging Economies paper using the VFI toolkit somewhere in the GitHub repo, but I haven’t been ab…

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## [Aiyagari example, Transition](https://discourse.vfitoolkit.com/t/aiyagari-example-transition/422)

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**Author:** [@aledinola](https://discourse.vfitoolkit.com/u/aledinola)\
**Replies:** 23\
**Last updated:** [September 7, 2026, 10:53pm UTC](https://discourse.vfitoolkit.com/t/aiyagari-example-transition/422 "2026-09-07T22:53:21Z")

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I think the comments in the Aiyagari example with Transition are not consistent with the code. The comments say that there is a change in beta (discount factor), while the code change alpha (capital share parameter in C…

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## [vfoptions.V\_Jplus1](https://discourse.vfitoolkit.com/t/vfoptions-v-jplus1/701)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [September 7, 2026, 4:19am UTC](https://discourse.vfitoolkit.com/t/vfoptions-v-jplus1/701 "2026-09-07T04:19:40Z")

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If you have a finite-horizon value function with N\_j periods, you can pass a ‘period N\_j+1 value fn’ using vfoptions.V\_Jplus1. For example, say you are evaluating policies that only impact working ages, so the retiremen…

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## [Supported implementation for risky assets,Epstein-Zin preferences and an absorbing retirement state?](https://discourse.vfitoolkit.com/t/supported-implementation-for-risky-assets-epstein-zin-preferences-and-an-absorbing-retirement-state/700)

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**Author:** [@Zhang\_Lu](https://discourse.vfitoolkit.com/u/Zhang_Lu)\
**Replies:** 6\
**Last updated:** [September 4, 2026, 7:44pm UTC](https://discourse.vfitoolkit.com/t/supported-implementation-for-risky-assets-epstein-zin-preferences-and-an-absorbing-retirement-state/700 "2026-09-04T19:44:16Z")

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Hi Robert and everyone, I am building a finite-horizon household portfolio model to study China’s gradual retirement-age reform. The current exogenous-retirement model works with riskyasset = 1, Epstein–Zin preferences,…

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## [Transition Path: 'additionalfactor' to speed up shooting algorithm](https://discourse.vfitoolkit.com/t/transition-path-additionalfactor-to-speed-up-shooting-algorithm/699)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 1\
**Last updated:** [August 28, 2026, 12:34am UTC](https://discourse.vfitoolkit.com/t/transition-path-additionalfactor-to-speed-up-shooting-algorithm/699 "2026-08-28T00:34:05Z")

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When using shooting algorithm to solve a transition path you set an update ‘factor’, this is done when you create the ‘howtoupdate’ rules. For example solving a transition path in the Aiyagari model we might set somethin…

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## [Transition Path: redesign of convergence criteria](https://discourse.vfitoolkit.com/t/transition-path-redesign-of-convergence-criteria/698)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [August 28, 2026, 12:24am UTC](https://discourse.vfitoolkit.com/t/transition-path-redesign-of-convergence-criteria/698 "2026-08-28T00:24:17Z")

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NOTE: Your transition path code probably just got slower, this is purely because the new default convergence criterion for transition paths is stricter than the old one. Previously, convergence in transition path was ba…

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## ['riskyasset' tests](https://discourse.vfitoolkit.com/t/riskyasset-tests/692)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 1\
**Last updated:** [August 27, 2026, 4:10am UTC](https://discourse.vfitoolkit.com/t/riskyasset-tests/692 "2026-08-27T04:10:18Z")

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‘riskyasset’ with aprime(d,u), which is used for portfolio-choice, now passes a whole bank of tests. This brings it in line with the kind of quality assurance that all the other ‘endogenous state types’ now pass. Should …

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## [Forum now uses https](https://discourse.vfitoolkit.com/t/forum-now-uses-https/697)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [August 27, 2026, 1:52am UTC](https://discourse.vfitoolkit.com/t/forum-now-uses-https/697 "2026-08-27T01:52:01Z")

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Finally got around to activating and forcing https for discourse.vfitoolkit.com. You shouldn’t notice any difference as a user, but everything is now done with better security.

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## [ValueFnIter\_Case1\_FHorz: internal reorg](https://discourse.vfitoolkit.com/t/valuefniter-case1-fhorz-internal-reorg/696)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [August 27, 2026, 1:44am UTC](https://discourse.vfitoolkit.com/t/valuefniter-case1-fhorz-internal-reorg/696 "2026-08-27T01:44:14Z")

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Most users can ignore this, is only for the info of those who look under the hood. Later today I will push a big reorg of ValueFnIter\_Case1\_FHorz. It has been internally rebuilt around a new hierarchy to make it easier t…

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## [AgentDist TPath commands require 'transpathoptions' input](https://discourse.vfitoolkit.com/t/agentdist-tpath-commands-require-transpathoptions-input/695)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 0\
**Last updated:** [August 24, 2026, 8:20am UTC](https://discourse.vfitoolkit.com/t/agentdist-tpath-commands-require-transpathoptions-input/695 "2026-08-24T08:20:14Z")

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Small change to both AgentDistOnTransPath\_Case1\_FHorz() and AgentDistOnTransPath\_InfHorz() now require transpathoptions as an input. This needed to be done as part of implementing the ability to handle markov shocks…

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## [OLG Transition Path Error](https://discourse.vfitoolkit.com/t/olg-transition-path-error/314)

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**Author:** [@Shiki](https://discourse.vfitoolkit.com/u/Shiki)\
**Replies:** 34\
**Last updated:** [August 24, 2026, 5:45am UTC](https://discourse.vfitoolkit.com/t/olg-transition-path-error/314 "2026-08-24T05:45:00Z")

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Hi Robert, I tried to use method in Aiyagari1994TransitionPath.m to OLGModel6 to see the impact of increasing in alpha. To make it run faster, I reduce the grid size, keep only 2 prices (r and Accbeq), and use only one …

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## [Exogenous shock and vfoptions.lowmemory](https://discourse.vfitoolkit.com/t/exogenous-shock-and-vfoptions-lowmemory/689)

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**Author:** [@robertdkirkby](https://discourse.vfitoolkit.com/u/robertdkirkby)\
**Replies:** 4\
**Last updated:** [August 10, 2026, 9:26am UTC](https://discourse.vfitoolkit.com/t/exogenous-shock-and-vfoptions-lowmemory/689 "2026-08-10T09:26:35Z")

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I have added to ./docs/ a file that spells out exogenous shocks and how vfoptions.lowmemory works for each kind of shocks. It is more to help AI than for humans to read. The toolkit is not yet entirely compliant with th…

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## [General Equilibrium Solver](https://discourse.vfitoolkit.com/t/general-equilibrium-solver/643)

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**Author:** [@aledinola](https://discourse.vfitoolkit.com/u/aledinola)\
**Replies:** 5\
**Last updated:** [August 8, 2026, 1:44am UTC](https://discourse.vfitoolkit.com/t/general-equilibrium-solver/643 "2026-08-08T01:44:20Z")

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The toolkit evaluates intermediate equations and general equilibrium conditions in HeteroAgentStationaryEqm\_Case1\_subfn, around lines 54-73 intermediateEqnsVec(gg)=real(GeneralEqmConditions\_Case1\_v3g(heteroagentoptions.…

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## [Deadbeat agents and feasibility constraints](https://discourse.vfitoolkit.com/t/deadbeat-agents-and-feasibility-constraints/595)

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**Author:** [@MichaelTiemann](https://discourse.vfitoolkit.com/u/MichaelTiemann)\
**Replies:** 10\
**Last updated:** [August 6, 2026, 10:40pm UTC](https://discourse.vfitoolkit.com/t/deadbeat-agents-and-feasibility-constraints/595 "2026-08-06T22:40:16Z")

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In my model, agents don’t earn enough to cover expenses when they are young (kappa\_j too small early in life), but as they gain experience and earning power, they can pay off their debts and buy houses instead of renting…

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