New method revolutionizes solving complex financial models with incomplete markets.
The article presents a method for solving economic models with complex financial markets. The researchers developed a numerical approach to analyze models with different investment options and incomplete markets. They tested the method on a two-country model with production and compared it to a complete markets version. The results showed that the method accurately solved both models, even when an analytic solution was not available. This method can help economists better understand how financial markets impact economic outcomes.