Art of Smooth Pasting (Paperback)

The main mathematical ideas are presented in a context with which economists will be familiar. Using a binomial approximation to Brownian motion, the mathematics is reduced to simple algebra, progressing to some equally simple limits. The starting point of the calculus of Brownian motion -- "Ito's Lemma" -- emerges by analogy with the economics of risk-aversion. Conditions for the optimal regulation of Brownian motion, including the important, but often mysterious "smooth pasting" condition, are derived in a similar way. Each theoretical derivation is illustrated by developing a significant economic application, drawn mainly from recent research in macro-economics and international economics.
This book aims to widen the understanding and use of stochastic dynamic choice and equilibrium models. It offers a simplified and heuristic exposition of the theory of Brownian motion and its control or regulation, rendering such methods more accessible to economists who do not require a de

General

Imprint:	Harwood-Academic Publishers
Country of origin:	Switzerland
Release date:	May 1993
First published:	1993
Authors:	A. Dixit
Dimensions:	216 x 138 x 9mm (L x W x T)
Format:	Paperback
Pages:	92
ISBN-13:	978-3-7186-5384-3
Categories:	Books > Business & Economics > Economics > Economic theory & philosophy Books > Science & Mathematics > Mathematics > Applied mathematics > Stochastics Promotions
LSN:	3-7186-5384-2
Barcode:	9783718653843

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