Document Type
Article
Publication Date
2009
Abstract
In this study we offer a new approach to proving the differentiability of the value function, which complements and extends the literature on dynamic programming. This result is then applied to the analysis of equilibrium in the recent class of monetary economies developed in [Lagos, R., Wright, R., 2005. A unified framework for monetary theory and policy analysis. journal of Political Economy 113, 463-484]. For this type of environments we demonstrate that the value function is differentiable and this guarantees that the marginal value of money balances is well defined.
Recommended Citation
Aliprantis, C.D., G. Camera, and F. Ruscitti (2009). Monetary equilibrium and the differentiability of the value function. Journal of Economic Dynamics and Control 33(2), 454-462. doi: 10.1016/j.jedc.2008.06.010
Peer Reviewed
1
Copyright
Elsevier
Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.
Comments
NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Dynamics and Control . Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Dynamics and Control, volume 33, issue 2 (2009). DOI: 10.1016/j.jedc.2008.06.010
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