Harvard University Press, 2003 Cloth: 978-0-674-01044-4 | Paper: 978-0-674-02576-9 | eISBN: 978-0-674-04507-1 Library of Congress Classification HB143.7.W45 2003 Dewey Decimal Classification 330.015193

ABOUT THIS BOOK | REVIEWS | TOC

ABOUT THIS BOOK

This compact and original exposition of optimal control theory and applications is designed for graduate and advanced undergraduate students in economics. It presents a new elementary yet rigorous proof of the maximum principle and a new way of applying the principle that will enable students to solve any one-dimensional problem routinely. Its unified framework illuminates many famous economic examples and models.

This work also emphasizes the connection between optimal control theory and the classical themes of capital theory. It offers a fresh approach to fundamental questions such as: What is income? How should it be measured? What is its relation to wealth?

The book will be valuable to students who want to formulate and solve dynamic allocation problems. It will also be of interest to any economist who wants to understand results of the latest research on the relationship between comprehensive income accounting and wealth or welfare.

REVIEWS Martin Weitzman has written an innovative and important new book on dynamic optimization--in particular, the Maximum Principle of optimal control theory--and its application to economics. It is an excellent textbook on optimal control theory, but it is much more than that. It explains how much of capital theory can be formulated in terms of a prototype optimal control problem, and it shows how, in the context of a multisector growth model, the Maximum Principle can be used to obtain a comprehensive measure of national income. Thus, this book will appeal to several different audiences: graduate students in economics, practicing economists with an interest in capital theory, and environmental economists...Weitzman deserves considerable applause for this clear and elegant book.
-- Robert S. Pindyck Journal of Economic Literature

TABLE OF CONTENTS

Introduction 1
Part I. Introduction to the Maximum Principle
1 The Calculus of Variations and the Stationary Rate of Return on Capital 13
2 The Prototype-Economic Control Problem 30
3 The Maximum Principle in One Dimension 66
4 Applications of the Maximum Principle in One Dimension 111
Part II. Comprehensive Accounting and the Maximum Principle
5 Optimal Multisector Growth and Dynamic Competitive Equilibrium 185
6 The Pure Theory of Perfectly Complete National Income Accounting 238
7 The Stochastic Wealth and Income Version of the Maximum Principle 295
References 329
Index 337

Harvard University Press, 2003 Cloth: 978-0-674-01044-4 Paper: 978-0-674-02576-9 eISBN: 978-0-674-04507-1

This compact and original exposition of optimal control theory and applications is designed for graduate and advanced undergraduate students in economics. It presents a new elementary yet rigorous proof of the maximum principle and a new way of applying the principle that will enable students to solve any one-dimensional problem routinely. Its unified framework illuminates many famous economic examples and models.

This work also emphasizes the connection between optimal control theory and the classical themes of capital theory. It offers a fresh approach to fundamental questions such as: What is income? How should it be measured? What is its relation to wealth?

The book will be valuable to students who want to formulate and solve dynamic allocation problems. It will also be of interest to any economist who wants to understand results of the latest research on the relationship between comprehensive income accounting and wealth or welfare.

REVIEWS Martin Weitzman has written an innovative and important new book on dynamic optimization--in particular, the Maximum Principle of optimal control theory--and its application to economics. It is an excellent textbook on optimal control theory, but it is much more than that. It explains how much of capital theory can be formulated in terms of a prototype optimal control problem, and it shows how, in the context of a multisector growth model, the Maximum Principle can be used to obtain a comprehensive measure of national income. Thus, this book will appeal to several different audiences: graduate students in economics, practicing economists with an interest in capital theory, and environmental economists...Weitzman deserves considerable applause for this clear and elegant book.
-- Robert S. Pindyck Journal of Economic Literature

TABLE OF CONTENTS

Introduction 1
Part I. Introduction to the Maximum Principle
1 The Calculus of Variations and the Stationary Rate of Return on Capital 13
2 The Prototype-Economic Control Problem 30
3 The Maximum Principle in One Dimension 66
4 Applications of the Maximum Principle in One Dimension 111
Part II. Comprehensive Accounting and the Maximum Principle
5 Optimal Multisector Growth and Dynamic Competitive Equilibrium 185
6 The Pure Theory of Perfectly Complete National Income Accounting 238
7 The Stochastic Wealth and Income Version of the Maximum Principle 295
References 329
Index 337