A simple proof of the necessity of the transversality condition

Takashi Kamihigashi

Economic Theory, 2002, vol. 20, issue 2, 427-433

Abstract: This note provides a simple proof of the necessity of the transversality condition for the differentiable reduced-form model. The proof uses only an elementary perturbation argument without relying on dynamic programming. The proof makes it clear that, contrary to common belief, the necessity of the transversality condition can be shown in a straightforward way.

Keywords: Transversality condition; Reduced-form model; Dynamic optimization. (search for similar items in EconPapers)
JEL-codes: C61 D90 G12 (search for similar items in EconPapers)
Date: 2002-02-26
Note: Received: January 22, 2001; revised version: April 2, 2001
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Citations: View citations in EconPapers (58)

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Working Paper: A Simple Proof of the Necessity of the Transversality Condition (2001)
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