An alternative approach to stochastic calculus for economic and financial models

Article Abstract:

McShane's stochastic differential equations are applied in solving problems associated with using Ito stochastic calculus in economic and financial modeling. Mchane's canonical model and alternative stochastic calculus is then applied to modify other economic and business models. These models were Fischer's classic model of index bond demand, option pricing model and the model for optimal investment under price level uncertainty.

Usage, Financial markets, Stochastic differential equations

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General dynamics in overlapping generations models

Article Abstract:

A solution is presented to the inverse problem for the overlapping generations (OG) model, which is widely used to analyze the effects of economic policies in a dynamic system. The class of economies which generates any twice continuously differentiable dynamics was characterized using an inverse approach using a methodology based on partial differential equations theory.

Research, Economic policy

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