Speedup algorithm: policy iterations

We consider the following m states model without labor as in 0827:

.

.

.

where

.

.

.

with probability matrix:

We also consider the following m states model with labor as in 0828:

.

.

.

where

and

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.

.

and

.

.

.

where both technology change parameter and form of leisure utility change according

to state. We implement policy iterations to speed up a little bit.