Monetary Equilibrium and the Differentiability of the Value Function
AbstractIn this study we offer a new approach to proving the differentiability of the value function, which complements and extends the literature on dynamic programming. This result is then applied to the analysis of equilibrium in the recent class of monetary economies developed in . For this type of environments we demonstrate that the value function is differentiable and this guarantees that the marginal value of money balances is well defined.
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Bibliographic InfoPaper provided by Purdue University, Department of Economics in its series Purdue University Economics Working Papers with number 1199.
Length: 16 pages
Date of creation: Apr 2007
Date of revision:
value function ; optimal plans ; money;
Find related papers by JEL classification:
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-04-21 (All new papers)
- NEP-CBA-2007-04-21 (Central Banking)
- NEP-MAC-2007-04-21 (Macroeconomics)
- NEP-MON-2007-04-21 (Monetary Economics)
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