Optimal control without solving the Bellman equation
Article Abstract:
The method of solving optimal control problems involving a system of stochastic differential or difference equations has been, since 1957, to solve for the value function in a partial differential equation, known as the Bellman equation. A better method is to solve the first-order conditions at maximum using Lagrange multipliers. As this method does not involve global approximation of the value function as in the Bellman equation, it is likely to be more accurate.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1993
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International transmission of monetary and fiscal policy: a symmetric N-country analysis with union
Article Abstract:
A study examining the effects of economic expansions and changes on a union of N-countries using a Dornbusch model and a Yaari-Blanchard model reveals that changes inside the union will force differences from the usual two-country model. However, by decomposing the world model into a model with N subsystems, it was possible to design a model depicting what union would look like. The independent systems must, however, be symmetrical.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1993
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A cooperative incentive equilibrium for a resource management problem
Article Abstract:
Cooperation between countries or governments always includes the worry that one of the operators will choose to cheat. This paper examines a two-nation model for whaling, and describes an incentive strategy which will give a Pareto-optimal decision for each. The strategy assumes that each nation knows of the other's whaling activities by the total number of vessels at sea.
Publication Name: Journal of Economic Dynamics & Control
Subject: Economics
ISSN: 0165-1889
Year: 1993
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