163 research outputs found
Monetary Equilibrium and the Differentiability of the Value Function
No full textIn 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 [Lagos, R., Wright, R., 2005. A unified framework for monetary theory and policy analysis. journal of Political Economy 113, 463-484]. 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
A Correspondence-Theoretic Approach to Dynamic Optimization
No full textThis paper introduces a method of optimization in infinite-horizon economies based on the theory of correspondences. The proposed approach allow us to study time-separable and non-time-separable dynamic economic models without resorting to fixed point theorems or transversality conditions. When our technique is applied to the standard time-separable model it provides an alternative and straightforward way to derive the common recursive formulation of these models by means of Bellman equations
Bilateral matching with Latin squares
No full textWe develop a general procedure to construct pairwise meeting processes characterized by two features. First, in each period the process maximizes the number of matches in the population. Second, over time agents meet everybody else exactly once. We call this type of meetings "absolute strangers." Our methodological contribution to economics is to offer a simple procedure to construct a type of decentralized trading environments usually employed in both theoretical and experimental economics. In particular, we demonstrate how to make use of the mathematics of Latin squares to enrich the modeling of matching economies.
A Random Matching Theory
No full textWe develop theoretical underpinnings of pairwise random matching processes. We formalize the mechanics of matching, and study the links between properties of the different processes and trade frictions. A particular emphasis is placed on providing a mapping between matching technologies and informational constraints
Interior Optima and the Inada Conditions
No full textWe present a new proof of the interiority of the policy function based on the Inada conditions. It is based on supporting properties of concave functions
A Theoretical Foundation for Bilateral Matching Mechanisms
No full textThis work introduces a rigorous set-theoretic foundation of bilateral matching mechanisms and studies their properties in a systematic manner. By providing a unified framework to study ilateral matching mechanisms, we formalize how different spatial/informational constraints can be implemented via a careful selection of matching mechanisms. In particular, this paper explains why and how various matching mechanisms generate different degrees of information isolation in the economyspatial interactions, matching, information frictions
Equilibrium Theory in Infinite Dimensional Spaces
No full textEste é o primeiro número da nova série da editora SpringerVerlag, "Studies in Economic Theory", editada por C.D. Aliprantis (Departamento de Matemática, IUPUI, Indianápolis, IN, EUA) e N.C. Yannelis (Departamento de Economia, Universidade de Illinois, Champaign, IL, EUA). Mais uma vez essa editora demonstra que está na vanguarda da divulgação científica na área de teoria econômica avançada.Este é o primeiro número da nova série da editora SpringerVerlag, "Studies in Economic Theory", editada por C.D. Aliprantis (Departamento de Matemática, IUPUI, Indianápolis, IN, EUA) e N.C. Yannelis (Departamento de Economia, Universidade de Illinois, Champaign, IL, EUA). Mais uma vez essa editora demonstra que está na vanguarda da divulgação científica na área de teoria econômica avançada
Monetary Equilibrium and the Differentiability of the Value Function
No full textIn 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 [13]. 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.value function ; optimal plans ; money
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