Working Paper: CEPR ID: DP18190
Authors: Jess Fernández-Villaverde; Isaiah Hull
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.
Keywords: Computational methods; Dynamic equilibrium economies; Quantum computing; Quantum annealing
JEL Codes: C63; C8; E37
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Implementation of quantum annealing techniques (C61) | Faster solution times for the RBC model (C69) |