**Random Quote:** *One has to keep a particular openness of mind.
Solving a problem is like going to a strange place, not to subdue it,
but simply to spend time there, to preserve one’s openness, to wait for
the signals, to wait for the strangeness to dissolve into sense.* –
Peter Whittle

This is the homepage for the second edition of my textbook Economic Dynamics: Theory and Computation, a graduate level introduction to deterministic and stochastic dynamics, dynamic programming and computational methods with economic applications.

Major changes include

- solutions to most exercises
- a new Jupyter code book with figures from the book and solutions to computational exercises
- most code within the text switched to pseudocode – pick your language of choice
- updated material on Markov dynamics
- updated references and citations
- many small fixes and improvements to wording and flow

- Dynamical systems
- Finite and continuous state Markov chains
- Stability and ergodicity
- Savings and consumption problems
- Markov control processes

A PDF of solutions to the majority of the theoretical exercises in the text is available here.

Solutions to most computational exercises can be found in the Jupyter code book mentioned above.

I have prepared a PDF of additional exercises for instructors. You can find the LaTeX file here. Instructors can email me for solutions.

I try hard to suppress them but I’m sure one or two remain. If you spot one in either the text or solutions please get in touch with me via john.stachurski@gmail.com.

“This book is a delightfully novel and thorough treatment of stochastic
dynamic modeling. It builds on well known results as well as
synthesizing the latest developments. Readers will find the many
pictures and graphics as well as computer code and examples incredibly
helpful. The book is beautifully written by a rapidly rising young star
and is a must read for any economist and other researchers who want to
learn the tools of dynamic stochastic modeling and apply these tools in
their own research.” - **William A. Brock**, Vilas Research Professor of
Economics, The University of Wisconsin, Madison

“An invaluable monograph on stochastic dynamical systems that’s ideally
suited as a supplement for graduate courses in computational general
equilibrium, macroeconomics, and asset pricing. The emphasis on economic
illustrations and computational codes makes this volume a rich source of
tools for students, instructors, and practitioners of economic
dynamics.” - **Costas Azariadis**, Mallinckrodt University Professor and
Director, Center for Dynamic Economics, Washington University, St. Louis

“Graduate macroeconomics courses are becoming technically more
sophisticated every year. Currently there are very few books available
that introduce the necessary mathematical techniques to understand
modern macroeconomics and that are comprehensible to the
nonmathematician. John Stachurski’s book helps fill this void. It is
easy to read–conversational in tone–and yet it does not shy away from
difficult material. But the book is more than just an introduction to
dynamics for the mathematically challenged graduate student. It will
also be an invaluable aid to the researcher as a reference book on
stochastic dynamics.” - **Roger Farmer**, Department of Economics, UCLA

“John Stachurski has written the book that convincingly links
theoretical models of discrete time, nonlinear growth models, and the
simulation and computation of the applications of these models. He makes
these growth models accessible to researchers through the connection of
theory and technique. Economic Dynamics covers foundational material
useful for students and researchers. I highly recommend this book.” -
**Leonard J. Mirman**, Department of Economics, University of Virginia