Questions tagged [linear-algebra]

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Recursive Models of dynamic linear economics (Hansen / Sargent, 2014) - optimal linear regulator problem / solution of bellman equation p. 34 ff

The optimal linear regulator problem according to Hansen/Sargent, 2014, Recursive models of dynamic linear economies, on page 34 ff. is stated as follows: $-E\sum_{t=0}^{\infty}\beta^t[x_t' R x_t+u_t'...
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Visualising eigenvectors/values

This might seem like an odd question but seeing as I haven't had any formal education in solving ratex models yet, it is something I have been thinking about a lot recently. Consider the following ...
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Short Run vs Long Run Cost Functions

Let $z_a$ and $z_b$ are two vectors of inputs. $z_a$ is variable in both long run and short run however $z_b$ is only variable in long run. Now let's suppose that the price of one of the inputs in ...
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How can I represent this observation regarding options in a formula?

By observing how an option's expiration P/L changes as its underlying asset price changes, we can discover the following system of equations: $\begin{cases}S_{Long} = C_{Long} + P_{Short} \\ S_{Short} ...