Have added commands to simulate Panel Data and Life-Cycle Profiles based on Finite Horizon Value Function Problems! This is done using the commands SimPanelValues_FHorz_Case1 and SimLifeCycleProfiles_FHorz_Case1. These commands automate many aspects of working with finite horizon models.

The main inputs are the formula for the variables for which panel data (or life-cycle profiles) should be generated, an ‘initial distribution’ from which agents are drawn/born, and the ‘Policy’ outputted by the ValueFnIter_Case1_FHorz command.

The outputs are a Panel Data set, or life-cycle profiles (mean, median, and some percentiles), for the variables whose formula are input.

Their use is illustrated as part of the ‘extended’ example to simulate panel data and life-cycle models from a basic ten-period consumption savings problem where income is a combination of a deterministic age-dependent component and a stochastic component. A description of the commands can be found in the Documentation.

For more details on the use of the command, it’s inputs, outputs, and internal options see the VFI Toolkit Documentation.

These commands can also be seen in action as part of a replication of Hubbard, Skinner & Zeldes (1994) – “The importance of precautionary motives in explaining individual and aggregate saving”. The replication also takes advantage of the as-yet-undocumented permanent/fixed type commands (e.g., ValueFnIter_Case1_FHorz_PType) which allow for different permanent/fixed types of agent.

[It is known that these commands will not work in Matlab R2015a. They give an error relating to max() of two vectors that does not occour in R2017a. I have no idea exactly which version in between the two is required.]