This solutions manual is a valuable companion volume to the classic textbook "Recursive Methods in Economic Dynamics" by Nancy L. Stokey and Robert E. Lucas. The exercises in the Stokey and Lucas book are integral to the text, and thus, a reader cannot fully appreciate the text without understanding the results developed in the exercises. This manual provides detailed answers to the central exercises in "Recursive Methods". It does not, however, provide answers to every exercise, thereby leaving instructors with a crucial "test bank" of questions. The authors have divided "Recursive Methods" into three categories. The first category includes the chapters whose primary function is to present material and mathematical background that will be used in subsequent core chapters of the book. The second category contains the core results on recursive methods. The third category consists of applications of these techniques to economic models. The authors' selection of exercises from these categories is designed to maximize the readers' understanding of "Recursive Methods". Efficient and lucid in approach, this manual should greatly enhance the value of "Recursive Methods" as a text for self-study.
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