Art of Smooth Pasting

di A. Dixit (Autore)

Harwood-Academic Publishers, 1993

This book aims to widen the understanding of stochastic dynamic choice and equilibrium models. It offers a simplified and heuristic exposition of the theory of Brownian motion and its control or regulation, rendering such methods more accessible to economists who do not require a detailed, mathematical treatment of the subject. The main mathematical ideas are presented in a context which with which economists will be familiar. Using a binomial approach to Brownian motion, the mathematics is reduced to simple algebra, progressing to some equally simple limits. The starting point of the calculus of Brownian motion - 'Ito's Lemma' - emerges by analogy with the economics of risk-aversion. Conditions for the optimal regulation of Brownian motion, including the important, but often mysterious, 'smooth pasting' condition, are derived in a similar way. Each theoretical derivation is illustrated by developing a significant economic application, drawn mainly from recent research in macroeconomics and international economics.

• Autore: A. Dixit
• Editore: Harwood-Academic Publishers
• Anno: 1993
• Rilegatura: Paperback / softback
• Pagine: 92 p.
• Dimensioni: 216 x 138 mm
• Peso: 136 gr.
• EAN: 9783718653843

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