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I know how to derive the transversality condition in simple models like the Ramsey model.

However, I am looking to develop a deeper understanding of transversality conditions in more complex models. However most macroeconomics books I've seen only have about 1 page about the transversality condition, namely its simplest form.

Is there a good book that shows how to deal with more complex trannversality conditions than the one in the ramsey model? e.g. if the utility function contains a term for assets?

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  • $\begingroup$ @HerrK. No those questions are all very simple for me. As an example of what I'm talking about is the following (mind you I'm not looking for a specific answer to that example, but for a book that delves into the theory to understand things like that example). Take the standard Ramsey model, but include capital in the instantaneous utility function. I.e. instead of $u(c_t)$ assume $u(c_t, k_t)$. If you solve this using the Euler Lagrange equations or Hamiltonian for a free endpoint problem, you will get a different (more complicated) transversality condition. Try it out if you want. $\endgroup$ – user56834 Nov 18 '17 at 19:08
  • $\begingroup$ Again, that would be an example of what I'm talking about $\endgroup$ – user56834 Nov 18 '17 at 19:08

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