I’m reading the chapter on 43. Endogenous Grid Method with python.
The numerical result is a grid y, which (given the example parameters) is in the domain ~(0, 10.7). If I’m not mistaken the domain is defined endogenously, as y_grid = k_plus_grid + c_grid and we iterate over c_grid.
In general, we think that k_plus_grid coincides with k_grid.
This picture illustrates the function c(y) with their domains:
One can see that if we substract the c-range from the y-domain we will get the initial k_grid.
Question. What is the proper way to get to the c(k) function with the domain (0, 4)? As of now, we have the k_grid between (0, 4). How do we get back to this domain given that direct application of the production function k = y^\frac{1}{\alpha} to y_grid leads to (0, 350) domain for k.