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A CORRESPONDENCE-THEORETIC APPROACH TO DYNAMIC OPTIMIZATION

Published online by Cambridge University Press:  01 May 2009

C. D. Aliprantis  and
G. Camera
C. D. Aliprantis
Affiliation:
Krannert School of Management, Purdue University
G. Camera*
Affiliation:
Krannert School of Management, Purdue University
*
Address correspondence to: Gabriele Camera, Department of Economics, Krannert School of Management, Purdue University, 403 West State Street, West Lafayette, IN 47907-2056, USA; e-mail: [email protected].
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Abstract

This paper introduces a method of optimization in infinite-horizon economies based on the theory of correspondences. The proposed approach allow us to study time-separable and non-time-separable dynamic economic models without resorting to fixed point theorems or transversality conditions. When our technique is applied to the standard time-separable model it provides an alternative and straightforward way to derive the common recursive formulation of these models by means of Bellman equations.

Keywords

Optimal PlansPolicy FunctionValue Function
Type
Articles
Information
Macroeconomic Dynamics , Volume 13 , Supplement S1 , May 2009 , pp. 97 - 117
Copyright
Copyright © Cambridge University Press 2009

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References

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