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Foundations of Dynamic Economic Analysis
Optimal Control Theory and Applications


  • Date Published: March 2005
  • availability: In stock
  • format: Paperback
  • isbn: 9780521603683

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About the Authors
  • Foundations of Dynamic Economic Analysis presents a modern and thorough exposition of the fundamental mathematical formalism used to study optimal control theory, i.e., continuous time dynamic economic processes, and to interpret dynamic economic behavior. The style of presentation, with its continual emphasis on the economic interpretation of mathematics and models, distinguishes it from several other excellent texts on the subject. This approach is aided dramatically by introducing the dynamic envelope theorem and the method of comparative dynamics early in the exposition. Accordingly, motivated and economically revealing proofs of the transversality conditions come about by use of the dynamic envelope theorem. Furthermore, such sequencing of the material naturally leads to the development of the primal-dual method of comparative dynamics and dynamic duality theory, two modern approaches used to tease out the empirical content of optimal control models. The stylistic approach ultimately draws attention to the empirical richness of optimal control theory, a feature missing in virtually all other textbooks of this type.

    • Most up-to-date, comprehensive textbook on optimal control theory, perennially important subject for economists/operations researchers
    • Subject matter taught around the world to graduate students in advanced mathematical methods across the sciences/social sciences
    • Exercises at end of each chapter on elementary and specialized topics
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    Product details

    • Date Published: March 2005
    • format: Paperback
    • isbn: 9780521603683
    • length: 592 pages
    • dimensions: 235 x 154 x 31 mm
    • weight: 0.811kg
    • contains: 47 b/w illus. 1 table
    • availability: In stock
  • Table of Contents

    1. Essential elements of continuous time dynamic optimization
    2. Necessary conditions for a simplified control problem
    3. Concavity and sufficiency in optimal control problems
    4. The maximum principle and economic interpretations
    5. Linear optimal control problems
    6. Necessary and sufficient conditions for a general class of control problems
    7. Necessary and sufficient conditions for isoperimetric problems
    8. Economic characterization of reciprocal isoperimetric problems
    9. The dynamic envelope theorem and economic interpretations
    10. The dynamic envelope theorem and transversality conditions
    11. Comparative dynamics via envelope methods
    12. Discounting, current values, and time consistency
    13. Local stability and phase portraits of autonomous differential equations
    14. Necessary and sufficient conditions for infinite horizon control problems
    15. The neoclassical optimal economic growth model
    16. A dynamic limit pricing model of the firm
    17. The adjustment cost model of the firm
    18. Qualitative properties of infinite horizon optimal control problems with one state variable and one control variable
    19. Dynamic programming and the Hamilton-Jacobi-Bellman equation
    20. Intertemporal duality in the adjustment cost model of the firm.

  • Instructors have used or reviewed this title for the following courses

    • Advanced Natural Resource Economics
    • Contemporary Issues in Fisheries Economics
    • Data Analysis for Managers
    • Economic Dynamics
    • Economics of Natural Resource Systems
    • Environmental Resource Economics
    • Environmental and Resource Economics
    • Macroeconomic Theory: Part I
    • Math for Economists
    • Math for Economists ll
    • Mathematical Tools and Economic Models
    • Natural Resource Economics
    • Special Topic: Game Theory
  • Author

    Michael R. Caputo, University of Central Florida
    Michael R. Caputo is Professor of Economics in the College of Business Administration, University of Central Florida, in Orlando. He was awarded his PhD in economics from the University of Washington, where he received the Henry C. Beuchel memorial award for distinguished undergraduate teaching by the Department of Economics in 1986. Professor Caputo then taught in the Department of Agriculture and Resource Economics at the University of California, Davis from 1987 to 2003. In 1998 he was inducted into the volume 'Who's Who Among America's Teachers'. Professor Caputo's research has appeared in numerous peer-reviewed journals, including the Review of Economic Studies, the Journal of Economic Theory, International Economic Review, Review of Economics and Statistics, the Journal of Economic Dynamics and Control, the Journal of Mathematical Economics, the Journal of Optimization Theory and Applications, the Journal of Economics, and the American Journal of Agricultural Economics.

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