Recursive utility and optimal growth with bounded or unbounded returns

Cuong Le van and Yiannis Vailakis

No 2002055, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper we propose a unifying approach to the study of recursive economic problems. Postulating an aggregator function as the fundamental expression of tastes, we explore conditions under which a utility function can be constructed. We also modify the usual dynamic programming arguments to include this class of models. We show that Bellman's equation still holds, so many results known for the additively separable case can be generalized for this general description of preferences. Our approach is general, allowing for both bounded and unbounded (above/below) returns. Many recursive economic models, including the standard examples studied in the literature, are particular cases of our setting.

Keywords: recursive utility; dynamic programming; Bellman equation; unbounded returns (search for similar items in EconPapers)
JEL-codes: C61 D90 (search for similar items in EconPapers)
Date: 2002-10
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Citations: View citations in EconPapers (22)

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Related works:
Journal Article: Recursive utility and optimal growth with bounded or unbounded returns (2005)
Working Paper: Recursive utility and optimal growth with bounded or unbounded returns (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2002055

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