On the Fragility of the Basis on the Hamilton-Jacobi-Bellman Equation in Economic Dynamics

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Tác giả: Yuhki Hosoya

Ngôn ngữ: eng

Ký hiệu phân loại: 330.153 Classical economics

Thông tin xuất bản: 2022

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Bộ sưu tập: Metadata

ID: 194748

In this paper, we provide an example of the optimal growth model in which there exist infinitely many solutions to the Hamilton-Jacobi-Bellman equation but the value function does not satisfy this equation. We consider the cause of this phenomenon, and find that the lack of a solution to the original problem is crucial. We show that under several conditions, there exists a solution to the original problem if and only if the value function solves the Hamilton-Jacobi-Bellman equation. Moreover, in this case, the value function is the unique nondecreasing concave solution to the Hamilton-Jacobi-Bellman equation. We also show that without our conditions, this uniqueness result does not hold.
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