@@ -24,7 +24,7 @@ Weiss's model.
2424
2525Hopenhayn and Nicolini's model is a generalization of Shavell and Weiss's along dimensions that we'll soon describe.
2626
27- ## Shavell and Weiss's Model
27+ ## Shavell and Weiss's model
2828
2929An unemployed worker orders stochastic processes of
3030consumption and search effort $\{ c_t , a_t\} _ {t=0}^\infty$
@@ -154,7 +154,7 @@ to compute $V^u_{j+1}$.
154154
155155* Iterate to convergence.
156156
157- ### Full Information
157+ ### Full information
158158
159159Another benchmark model helps set the stage for the model with private information that we ultimately want to study.
160160
@@ -253,7 +253,7 @@ during the unemployment spell.
253253But the worker's consumption is not smoothed across states of
254254employment and unemployment unless $V=V^e$.
255255
256- ### Incentive Problem
256+ ### Incentive problem
257257
258258The preceding efficient insurance scheme assumes that the insurance agency
259259controls both $c$ and $a$.
@@ -312,7 +312,7 @@ The full-information contract thus
312312relies on the agency's ability to control *both* the unemployed
313313worker's consumption *and* his search effort.
314314
315- ## Private Information
315+ ## Private information
316316
317317Following {cite}`Shavell_Weiss_79` and
318318 {cite}`Hopenhayn_Nicolini_97`, now assume that the unemployment insurance agency cannot
@@ -415,7 +415,7 @@ unemployment.
415415
416416
417417
418- ### Computational Details
418+ ### Computational details
419419
420420It is useful to note that there
421421are natural lower and upper bounds to the set
@@ -494,7 +494,7 @@ where $c$ and $a$ are given by equations {eq}`eq:hugo21` and {eq}`eq:hugo22`.
494494
495495
496496
497- ### Python Computations
497+ ### Python computations
498498
499499We'll approximate the planner's optimal cost function with cubic splines.
500500
@@ -524,7 +524,7 @@ class params_instance:
524524 self.Ve = uw/(1-β)
525525```
526526
527- ### Parameter Values
527+ ### Parameter values
528528
529529
530530For the other parameters appearing in the above Python code, we'll calibrate parameter $r$
@@ -638,7 +638,7 @@ Now that we have calibrated our the parameter $r$, we can continue with solving
638638
639639+++
640640
641- ### Computation under Private Information
641+ ### Computation under private information
642642
643643+++
644644
@@ -796,7 +796,7 @@ a_star_interp = sp.interpolate.interp1d(Vu_grid,a_star)
796796V_star_interp = sp.interpolate.interp1d(Vu_grid,V_star)
797797```
798798
799- ### Replacement Ratios and Continuation Values
799+ ### Replacement ratios and continuation values
800800
801801+++
802802
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