Jump to ContentJump to Main Navigation
Recursive Models of Dynamic Linear Economies$
Users without a subscription are not able to see the full content.

Lars Peter Hansen and Thomas J. Sargent

Print publication date: 2013

Print ISBN-13: 9780691042770

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691042770.001.0001

Show Summary Details
Page of

PRINTED FROM PRINCETON SCHOLARSHIP ONLINE (www.princeton.universitypressscholarship.com). (c) Copyright Princeton University Press, 2017. All Rights Reserved. Under the terms of the licence agreement, an individual user may print out a PDF of a single chapter of a monograph in HSO for personal use (for details see http://www.universitypressscholarship.com/page/privacy-policy).date: 12 December 2017

Optimal Resource Allocations

Optimal Resource Allocations

Chapter:
(p.79) Chapter 5 Optimal Resource Allocations
Source:
Recursive Models of Dynamic Linear Economies
Author(s):

Lars Peter Hansen

Thomas J. Sargent

Publisher:
Princeton University Press
DOI:10.23943/princeton/9780691042770.003.0005

This chapter describes a planning problem that generates competitive equilibrium allocations and compares two methods for solving it. The first method uses state- and date-contingent Lagrange multipliers; the second uses dynamic programming. The first method reveals a direct connection between the Lagrange multipliers and the equilibrium prices in a competitive equilibrium to be analyzed in Chapter 7. The second method provides good algorithms for calculating both the law of motion for the optimal quantities and the Lagrange multipliers. The chapter also describes a set of MATLAB programs that solve the planning problem and represent its solution in various ways. These programs are used to solve the planning problem for six sample economies formed by choosing particular examples of the ingredients from Chapter 4.

Keywords:   competitive equilibrium allocation, resource allocation, linear-quadratic optimal control, Lagrange multipliers, dynamic programming, law of motion

Princeton Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us.