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lectures/newton_method.md

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```{index} single: python
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```
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# Application of Newton's Method
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# Using Newton's Method to Solve Economic Models
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```{contents} Contents
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## Fixed Point Computation Using Newton's Method
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In this section, we will solve the fixed point of the law of motion for capital under the Solow model.
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We will inspect the fixed point visually, solve it by successive approximation, and then apply Newton's method to achieve faster convergence.
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(solow)=
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### The Solow Model
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## Multivariate Newton’s Method
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In this section, we will first introduce a two-good problem, present a visualization of the problem, and solve the equilibrium of the two-good market using both a root finder in `SciPy` and Newton's method.
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We will then expand the idea to a larger market with 5000 goods and compare the performance of the two methods again to show a significant improvement in performance using Netwon's method.
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### A Two Goods Market Equilibrium
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Before moving to higher dimensional settings, let's compute the market equilibrium of a two-good problem.

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