Monetary Equilibrium and the Differentiability of the Value Function

C.D. Aliprantis, G. Camera and F. Ruscitti

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: In 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.

Keywords: value function; optimal plans; money (search for similar items in EconPapers)
JEL-codes: C61 E00 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2007-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1199

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