Thursday, April 3, 2014

Monte Carlo economy

I've still been looking into the deviations (for the 1960s and the 1990s) of the actual path of the economy from the Monte Carlo average (see here and here). Removing the data from the recession in 1960 right at the start of the data fixes the problem - there is a downward jog that starts the integration off in the wrong direction in the simulations at the links.

It would make sense not to set the initial conditions for a differential equation in the middle of a shock. However, there still is the issue of the large deviation in the 1990s.

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