Art of Smooth Pasting (Hardcover)

This book aims to widen the understanding 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 detailed, mathematical treatment of the subject.
The main mathematical ideas are presented in a context which with which economists will be familiar. Using a binomial approach 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 macroeconomics and international economics.

General

Imprint:	Routledge
Country of origin:	United Kingdom
Release date:	December 2001
First published:	1993
Authors:	A. Dixit
Dimensions:	216 x 138 x 12mm (L x W x T)
Format:	Hardcover
Pages:	88
ISBN-13:	978-0-415-26937-7
Categories:	Books > Business & Economics > Economics > Economic theory & philosophy Books > Science & Mathematics > Mathematics > Applied mathematics > Stochastics Promotions
LSN:	0-415-26937-7
Barcode:	9780415269377

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