Collocation method with transition matrices

We continue to consider the same model:

but

for the first group of period of time

for the second group of period of time

.

.

.

for the ns-th group of period of time.

Here, we also change the corresponding parameter’s across breaks.

When we calculate policy functions for each group, we use collocation method in the

following options:

aopt=0 polynomials

aopt=1 long polynomials

aopt=2 reciprocal of polynomials

apot=3 rational of polynomials

as in the case with a single group of parameter.