Policy function calculation from value function iterations

We now change both technology and leisure utility function.

We consider the following mixed four-state model:

where

and the following switched four-state model:

for t=1,5,9,13,. . .

for t=2,6,10,14,. . .

for t=3,7,13,15,. . .

for t=4,8,12,16,. . .

where

for both models. They seem like the same forms but they are

where each is calculated from

and

for state 1

and

for state 2

and

for state 3

and

for state 4

We had better compute each policy function separately.