Solving the Non-Convexity Problem in Some Shopping-Time and Human-Capital Models
Ensaios Economicos No. 567
15 Pages Posted: 4 Feb 2014
Date Written: September 10, 2004
Abstract
Several works in the shopping-time and in the human-capital literature, due to the nonconcavity of the underlying Hamiltonian, use first-order conditions in dynamic optimization to characterize necessity, but not sufficiency, in intertemporal problems. In this work I choose one paper in each one of these two areas and show that optimality can be characterized by means of a simple application of Arrow's (1968) sufficiency theorem.
Keywords: Arrow's Suffciency Theorem, Optimal Control, Shopping-Time, Human Capital, Growth
JEL Classification: E40, E50
Suggested Citation: Suggested Citation
Cysne, Rubens Penha, Solving the Non-Convexity Problem in Some Shopping-Time and Human-Capital Models (September 10, 2004). Ensaios Economicos No. 567, Available at SSRN: https://ssrn.com/abstract=2390019 or http://dx.doi.org/10.2139/ssrn.2390019
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