This paper introduces a method of optimization in infinite-horizon economies based on the theory of correspondences. The proposed approach allow us to study time-separable and non-time-separable dynamic economic models without resorting to fixed point theorems or transversality conditions. When our technique is applied to the standard time-separable model it provides an alternative and straightforward way to derive the common recursive formulation of these models by means of Bellman equations.
Aliprantis, C.D. and G. Camera (2009). A Correspondence-theoretic approach to dynamic optimization. Macroeconomic Dynamics, 13, 97–117. doi: 10.1017/S1365100509080134
Cambridge University Press
This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Macroeconomic Dynamics, volume 13 (2009), following peer review. The definitive publisher-authenticated version is available online at DOI: 10.1017/S1365100509080134