New answers tagged bellman-equations
5
There are two interrelated maximisation problems. The first is the infinite horizon maximisation problem:
$$
\begin{align*}
v(k) = &\max_{a_1, a_2, \ldots} \sum_{t = 0}^\infty \delta^t F(k_t, c_t),\\
\text{ subject to } & k_{t+1} = g(k_t, a_t),\\
& a_t = \Gamma(k_t),\\
& k_0 = k
\end{align*}
$$
Here we call $a_t$ the decision variables, $k_t$ ...
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