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Fix CRRA=1.0 division by zero errors across consumption models #1587

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Fix CRRA=1.0 division by zero errors across consumption models #1587

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ec458aa
Initial plan
Copilot Jul 30, 2025
1b45291
Fix CRRA=1.0 division by zero errors with epsilon workaround
Copilot Jul 30, 2025
0bb4852
Remove trailing whitespace from CRRA=1.0 fix
Copilot Jul 30, 2025
c01a227
Expand CRRA=1.0 fix to ConsPrefShockModel.py
Copilot Jul 30, 2025
31ca7ca
Fix CRRA=1.0 issues in additional consumption models
Copilot Jul 30, 2025
f5d610d
Remove accidentally committed backup file and update .gitignore
Copilot Oct 29, 2025
18b4067
Merge branch 'main' of https://github.com/econ-ark/HARK into copilot/…
Copilot Dec 2, 2025
466b83e
Sync with main and fix test for CRRA values near 1.0
Copilot Dec 2, 2025
9545127
Address code review feedback: use np.isclose, CRRA_EPSILON constant, …
Copilot Dec 2, 2025
5df8bd9
Revert epsilon workaround - need proper CRRA=1 limit formulations
Copilot Dec 2, 2025
fb44fe1
Merge branch 'main' into copilot/fix-75
alanlujan91 Dec 3, 2025
50cfac2
Fix CRRA=1 (log utility) division by zero by implementing proper limi…
Copilot Dec 3, 2025
22e7342
Address code review: add numba compatibility comments and use consist…
Copilot Dec 3, 2025
017725e
Merge remote-tracking branch 'upstream/main' into copilot/fix-75
alanlujan91 Jan 3, 2026
7855b2c
Refactor utility functions to use CRRAutility and add wealth-in-utili…
alanlujan91 Jan 3, 2026
4833249
Fix CRRA=1 handling and add tests for log utility edge case
alanlujan91 Jan 3, 2026
f64db8d
Remove input validation from vNvrsSlope and update usage
alanlujan91 Jan 3, 2026
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14 changes: 13 additions & 1 deletion HARK/ConsumptionSaving/ConsBequestModel.py
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Original file line number Diff line number Diff line change
Expand Up @@ -419,7 +419,19 @@ def calc_vPPnext(S, a, R):
mNrm_temp = np.insert(mNrm_temp, 0, mNrmMinNow)
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
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MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
# Handle CRRA=1.0 case to avoid division by zero

if CRRA == 1.0:

# When CRRA=1.0, use a small epsilon to avoid division by zero

CRRA_safe = 1.0 + 1e-8

MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))

else:

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MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrsFuncNow = CubicInterp(
mNrm_temp, vNvrs_temp, vNvrsP_temp, MPCminNvrs * hNrmNow, MPCminNvrs
)
Expand Down
14 changes: 13 additions & 1 deletion HARK/ConsumptionSaving/ConsGenIncProcessModel.py
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Original file line number Diff line number Diff line change
Expand Up @@ -488,7 +488,19 @@ def calc_vPP_next(S, a, p):
)

# Add data at the lower bound of p
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
# Handle CRRA=1.0 case to avoid division by zero

if CRRA == 1.0:

# When CRRA=1.0, use a small epsilon to avoid division by zero

CRRA_safe = 1.0 + 1e-8

MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))

else:

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MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
m_temp = np.reshape(mLvl_temp[:, 0], (aNrmCount + 1, 1))
mLvl_temp = np.concatenate((m_temp, mLvl_temp), axis=1)
vNvrs_temp = np.concatenate((MPCminNvrs * m_temp, vNvrs_temp), axis=1)
Expand Down
40 changes: 35 additions & 5 deletions HARK/ConsumptionSaving/ConsIndShockModel.py
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Original file line number Diff line number Diff line change
Expand Up @@ -373,7 +373,21 @@ def solve_one_period_ConsPF(
# Calculate (pseudo-inverse) value at each consumption kink point
vNow = uFunc(cNrmNow) + EndOfPrdv
vNvrsNow = uFunc.inverse(vNow)
vNvrsSlopeMin = MPCminNow ** (-CRRA / (1.0 - CRRA))

# Handle CRRA=1.0 case to avoid division by zero
if CRRA == 1.0:
# When CRRA=1.0, use a small epsilon to avoid division by zero
# This is a temporary fix until proper limit calculation is implemented
import warnings
warnings.warn(
"CRRA=1.0 detected. Using CRRA=1.0+1e-8 to avoid division by zero. "
"This is a temporary workaround.",
UserWarning
)
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CRRA_safe = 1.0 + 1e-8
vNvrsSlopeMin = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))
else:
vNvrsSlopeMin = MPCminNow ** (-CRRA / (1.0 - CRRA))

# Add an additional point to the list of gridpoints for the extrapolation,
# using the new value of the lower bound of the MPC.
Expand Down Expand Up @@ -786,8 +800,16 @@ def solve_one_period_ConsIndShock(
vNvrsP_temp = vP_temp * uFunc.derinv(v_temp, order=(0, 1))
mNrm_temp = np.insert(mNrm_temp, 0, mNrmMinNow)
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))

# Handle CRRA=1.0 case to avoid division by zero
if CRRA == 1.0:
# When CRRA=1.0, use a small epsilon to avoid division by zero
CRRA_safe = 1.0 + 1e-8
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA_safe / (1.0 - CRRA_safe)))
MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))
else:
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrsFuncNow = CubicInterp(
mNrm_temp,
vNvrs_temp,
Expand Down Expand Up @@ -1053,8 +1075,16 @@ def solve_one_period_ConsKinkedR(
vNvrsP_temp = vP_temp * uFunc.derinv(v_temp, order=(0, 1))
mNrm_temp = np.insert(mNrm_temp, 0, mNrmMinNow)
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))

# Handle CRRA=1.0 case to avoid division by zero
if CRRA == 1.0:
# When CRRA=1.0, use a small epsilon to avoid division by zero
CRRA_safe = 1.0 + 1e-8
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA_safe / (1.0 - CRRA_safe)))
MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))
else:
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxNow ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrsFuncNow = CubicInterp(
mNrm_temp,
vNvrs_temp,
Expand Down
28 changes: 26 additions & 2 deletions HARK/ConsumptionSaving/ConsIndShockModelFast.py
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Original file line number Diff line number Diff line change
Expand Up @@ -341,7 +341,19 @@ def _solveConsPerfForesightNumba(
mNrmMinNow = mNrmNow[0]

# See the PerfForesightConsumerType.ipynb documentation notebook for the derivations
vFuncNvrsSlope = MPCmin ** (-CRRA / (1.0 - CRRA))
# Handle CRRA=1.0 case to avoid division by zero

if CRRA == 1.0:

# When CRRA=1.0, use a small epsilon to avoid division by zero

CRRA_safe = 1.0 + 1e-8

vFuncNvrsSlope = MPCmin ** (-CRRA_safe / (1.0 - CRRA_safe))

else:

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vFuncNvrsSlope = MPCmin ** (-CRRA / (1.0 - CRRA))

return (
mNrmNow,
Expand Down Expand Up @@ -869,7 +881,19 @@ def _add_vFuncNumba(
mNrmGrid = _np_insert(mNrmGrid, 0, mNrmMinNow)
vNvrs = _np_insert(vNvrs, 0, 0.0)
vNvrsP = _np_insert(vNvrsP, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
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Outdated
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
# Handle CRRA=1.0 case to avoid division by zero

if CRRA == 1.0:

# When CRRA=1.0, use a small epsilon to avoid division by zero

CRRA_safe = 1.0 + 1e-8

MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))

else:

MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))

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Outdated
return (
mNrmGrid,
Expand Down
24 changes: 18 additions & 6 deletions HARK/ConsumptionSaving/ConsPrefShockModel.py
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Original file line number Diff line number Diff line change
Expand Up @@ -345,9 +345,15 @@ def calc_vPPnext(S, a, R):
vNvrs_temp = uFunc.inv(v_temp)
vNvrsP_temp = vP_temp * uFunc.derinv(v_temp, order=(0, 1))
mNrm_temp = np.insert(mNrm_temp, 0, mNrmMinNow)
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0) # Handle CRRA=1.0 case to avoid division by zero
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if CRRA == 1.0:
# When CRRA=1.0, use a small epsilon to avoid division by zero
CRRA_safe = 1.0 + 1e-8
Comment thread
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Outdated
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA_safe / (1.0 - CRRA_safe)))
MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))
else:
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrsFuncNow = CubicInterp(
mNrm_temp, vNvrs_temp, vNvrsP_temp, MPCminNvrs * hNrmNow, MPCminNvrs
)
Expand Down Expand Up @@ -656,9 +662,15 @@ def calc_vPPnext(S, a, R):
vNvrs_temp = uFunc.inv(v_temp)
vNvrsP_temp = vP_temp * uFunc.derinv(v_temp, order=(0, 1))
mNrm_temp = np.insert(mNrm_temp, 0, mNrmMinNow)
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0) # Handle CRRA=1.0 case to avoid division by zero

Copilot AI Dec 2, 2025

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[nitpick] The inline comment "# Handle CRRA=1.0 case to avoid division by zero" on line 665 is placed at the end of the previous logical statement (np.insert(vNvrs_temp, 0, 0.0)), which is confusing. The comment should be on its own line before the if statement (line 666) for clarity.

Suggested change
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0) # Handle CRRA=1.0 case to avoid division by zero
vNvrs_temp = np.insert(vNvrs_temp, 0, 0.0)
# Handle CRRA=1.0 case to avoid division by zero

Copilot uses AI. Check for mistakes.
if CRRA == 1.0:
# When CRRA=1.0, use a small epsilon to avoid division by zero
CRRA_safe = 1.0 + 1e-8
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA_safe / (1.0 - CRRA_safe)))
MPCminNvrs = MPCminNow ** (-CRRA_safe / (1.0 - CRRA_safe))
else:
vNvrsP_temp = np.insert(vNvrsP_temp, 0, MPCmaxEff ** (-CRRA / (1.0 - CRRA)))
MPCminNvrs = MPCminNow ** (-CRRA / (1.0 - CRRA))
vNvrsFuncNow = CubicInterp(
mNrm_temp, vNvrs_temp, vNvrsP_temp, MPCminNvrs * hNrmNow, MPCminNvrs
)
Expand Down
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