Commit ca66a0e
Improve Job Search IV: Add explanations, simulation, and cross-sectional analysis
Major improvements to Job Search IV (Fitted Value Function Iteration):
1. Notation and clarity:
- Changed utility function from u(c, γ) to u(x, γ) to avoid confusion with
unemployment compensation parameter c
- Fixed random variable notation: w → W_t in model description
- Changed z_i → Z_i in Monte Carlo formula
- Updated Model constructor from named to positional arguments
- Renamed variables in T and get_greedy: accept → v_e, reject → continuation_values
- Standardized naming: h_star → h, w_star → w_bar
2. Added explanations:
- Explained the explicit form of (Pv_u)(w) with derivation
- Changed "From the equation above" to "Recall that we have"
- Added explanation before Bellman operator about Monte Carlo integration
3. Updated plot styling:
- Simplified plot to match Job Search III style
- Show only continuation value h and employment value v_e
- Updated labels and explanation text
4. Added Simulation section:
- Implemented update_agent function with job separation logic
- Added simulate_employment_path function
- Created three-panel plot showing employment status, wage path, and
cumulative unemployment rate
- Properly handles Markov wage dynamics with separation
5. Added Cross-Sectional Analysis subsection:
- Vectorized update function for parallel agent simulation
- JIT-compiled simulation using lax.fori_loop
- Cross-sectional unemployment histogram
- Comparison of time-average vs cross-sectional unemployment rates
6. Added missing import: from functools import partial
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Co-Authored-By: Claude <[email protected]>1 parent b8aa307 commit ca66a0e
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