Questions tagged [dynamic-optimization]

Consider a simple dynamic consumption-saving problem. A solution can be characterised using a Lagrangian approach that generates a set of first order conditions and some boundary conditions. An alternative approach is to set use a Bellman equation.…

I understand what the fixed point is, but don't understand what the fixed point 'problem'. Is it resolved by 'fixed point iteration'? I am reading a paper, and the paper mentions that the default initialization is such that the code reaches the…

I am reading Walsh's (2003) book on monetary economics. Specifically the chapter on money in utility function. I understand the basics of a value functions but I can't seem to get the same results as the author. Where I.e the per capita budget…