Some notes on discount factor restrictions for dynamic optimization problems

Gerhard Sorger

Journal of Mathematical Economics, 2009, vol. 45, issue 7-8, 435-448

Abstract: We consider dynamic optimization problems on one-dimensional state spaces. Under standard smoothness and convexity assumptions, the optimal solutions are characterized by an optimal policy function h mapping the state space into itself. There exists an extensive literature on the relation between the size of the discount factor of the dynamic optimization problem on the one hand and the properties of the dynamical system xt+1=h(xt) on the other hand. The purpose of this paper is to survey some of the most important contributions of this literature and to modify or improve them in various directions. We deal in particular with the topological entropy of the dynamical system, with its Lyapunov exponents, and with its periodic orbits.

Keywords: Dynamic; optimization; Discounting; Topological; entropy; Lyapunov; exponents; Periodic; orbits (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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Working Paper: some notes on discount factor restrictions for dynamic optimization problems (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:45:y:2009:i:7-8:p:435-448

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