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arXiv · 2306.04285

Dynamic Programming on a Quantum Annealer: Solving the RBC Model

Jesús Fernández-Villaverde·Isaiah Hull
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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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BibTeXRIS

Jesús Fernández-Villaverde, Isaiah Hull. 2023-06-07. Dynamic Programming on a Quantum Annealer: Solving the RBC Model. https://arxiv.org/abs/2306.04285

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