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Maximum Principle for Boundary Control Problems Arising in Optimal Investment with Vintage Capital

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Author Info
Silvia Faggian () (Department of Applied Mathematics, University of Venice)

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Abstract

The paper concerns the study of the Pontryagin Maximum Principle for an infinite dimensional and infinite horizon boundary control problem for linear partial differential equations. The optimal control model has already been studied both in finite and infinite horizon with Dynamic Programming methods in a series of papers by the same author et al. [26, 27, 28, 29, 30]. Necessary and sufficient optimality conditions for open loop controls are established. Moreover the co-state variable is shown to coincide with the spatial gradient of the value function evaluated along the trajectory of the system, creating a parallel between Maximum Principle and Dynamic Programming. The abstract model applies, as recalled in one of the first sections, to optimal investment with vintage capital.

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File URL: http://www.dma.unive.it/wpdma/2008wp181.pdf
File Format: application/pdf
File Function: First version, 2008
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Publisher Info
Paper provided by Department of Applied Mathematics, University of Venice in its series Working Papers with number 181.

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Length: 18 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:vnm:wpaper:181

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Postal: Dorsoduro, 3825/E, 30123 Venezia
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Web page: http://www.dma.unive.it/
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Related research
Keywords: Linear convex control; Boundary control; Hamilton–Jacobi–Bellman equations; Optimal investment problems; Vintage capital;

Find related papers by JEL classification:
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
C62 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Existence and Stability Conditions of Equilibrium
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity

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This page was last updated on 2009-11-25.


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