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On Envelope Theorems in Economics: Inspired by a Revival of a Forgotten Lecture

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  • Löfgren, Karl-Gustaf

    () (Department of Economics, Umeå University)

Abstract

This paper studies how envelope theorems have been used in Economics, their history and also who first introduced them. The existing literature is full of them and the reason is that all families of optimal value functions can produce them. The paper is driven by curiosity, but hopefully it will give the reader some new insights.

Suggested Citation

  • Löfgren, Karl-Gustaf, 2011. "On Envelope Theorems in Economics: Inspired by a Revival of a Forgotten Lecture," Umeå Economic Studies 830, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0830
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    References listed on IDEAS

    as
    1. Seierstad, Atle, 1982. "Differentiability properties of the optimal value function in control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 4(1), pages 303-310, November.
    2. Li, Chuan-Zhong & Löfgren, Karl-Gustaf, 2009. "Genuine Saving under Stochastic Growth," Umeå Economic Studies 779, Umeå University, Department of Economics.
    3. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
    4. Caputo, Michael R., 1990. "How to do comparative dynamics on the back of an envelope in optimal control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 655-683, October.
    5. Michael R. Caputo, 1990. "Comparative Dynamics via Envelope Methods in Variational Calculus," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 689-697.
    6. Torsten Schmidt, 2004. "Really Pushing the Envelope: Early Use of the Envelope Theorem by Auspitz and Lieben," History of Political Economy, Duke University Press, vol. 36(1), pages 103-129, Spring.
    7. Aronsson, Thomas & Löfgren, Karl-Gustaf & Nyström, Kaj, 2003. "Stochastic Cost Benefit Rules: A Back-of-a-Lottery-Ticket Calculation Method," Umeå Economic Studies 606, Umeå University, Department of Economics.
    8. Chuan-Zhong Li & Karl-Gustaf Löfgren, 2008. "Evaluating Projects in a Dynamic Economy: Some New Envelope Results," German Economic Review, Verein für Socialpolitik, vol. 9, pages 1-16, February.
    9. John P. Windmuller, 1974. "Introduction," ILR Review, Cornell University, ILR School, vol. 28(1), pages 3-6, October.
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    More about this item

    Keywords

    Envelope theorems; names and history; value functions;

    JEL classification:

    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General

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