Policy function calculation from value function iterations

 

We consider the following general model with m states:

 

 

 

 .

 .

 .

 

where

 

 .

 .

 .

 

with probability matrix:

 

 

whose row sums are all zeros.

 

We also consider the following general switching model:

 

We consider the following general model with m states:

 

 

 

 .

 .

 .

 

for the same cfs as above.