Dynamic Programming on a Quantum Annealer: Solving the RBC Model / Jesús Fernández-Villaverde, Isaiah J. Hull.

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Fernández-Villaverde, Jesús

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w31326.Publication details: Cambridge, Mass. National Bureau of Economic Research 2023.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all states and generating candidate global solutions in milliseconds, irrespective of problem size. Using existing quantum hardware, we achieve an order-of-magnitude speed-up in solving the real business cycle model over benchmarks in the literature. We also provide a detailed introduction to quantum annealing and discuss its potential use for more challenging economic problems.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w31326 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w31323 Anticipating Climate Change Across the United States /	nber w31324 Do Green Users Become Green Voters? /	nber w31325 Firm Investments in Artificial Intelligence Technologies and Changes in Workforce Composition /	nber w31326 Dynamic Programming on a Quantum Annealer: Solving the RBC Model /	nber w31327 GDP and Temperature: Evidence on Cross-Country Response Heterogeneity /	nber w31328 School Choice, Competition, and Aggregate School Quality /	nber w31329 Corporate Discount Rates /	Next

June 2023.

We introduce a novel approach to solving dynamic programming problems, such as those in many economic models, on a quantum annealer, a specialized device that performs combinatorial optimization. Quantum annealers attempt to solve an NP-hard problem by starting in a quantum superposition of all states and generating candidate global solutions in milliseconds, irrespective of problem size. Using existing quantum hardware, we achieve an order-of-magnitude speed-up in solving the real business cycle model over benchmarks in the literature. We also provide a detailed introduction to quantum annealing and discuss its potential use for more challenging economic problems.