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A simple proof of Ekeland and Scheinkman's result on the necessity of a transversality condition

Author

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  • Takashi Kamihigashi

    (Department of Economics, SUNY-Stony Brook, Stony Brook, NY 11794-4384, USA)

Abstract

Ekeland and Scheinkman (1986) prove the necessity of a standard transversality condition under certain technical conditions. Their result is one of the most powerful on the necessity of a transversality condition currently available in the literature, and their proof involves numerous estimations and relies on Ekeland's variational principle and Fatou's lemma. This note relaxes some of their assumptions and provides a simple proof that uses neither Ekeland's principle nor a convergence result like Fatou's lemma.

Suggested Citation

  • Takashi Kamihigashi, 2000. "A simple proof of Ekeland and Scheinkman's result on the necessity of a transversality condition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(2), pages 463-468.
    • Handle: RePEc:spr:joecth:v:15:y:2000:i:2:p:463-468
    Note: Received: April 24, 1998; revised version: September 8, 1998
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    Citations

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    Cited by:

    1. Buiter, Willem H. & Sibert, Anne C., 2007. "Deflationary Bubbles," Macroeconomic Dynamics, Cambridge University Press, vol. 11(4), pages 431-454, September.
    2. Takuma Kunieda & Tarishi Matsuoka & Akihisa Shibata, 2017. "Asset Bubbles, Technology Choice, and Financial Crises," Discussion Paper Series 157, School of Economics, Kwansei Gakuin University, revised Feb 2017.
    3. Kamihigashi, Takashi, 2005. "Necessity of the transversality condition for stochastic models with bounded or CRRA utility," Journal of Economic Dynamics and Control, Elsevier, vol. 29(8), pages 1313-1329, August.
    4. Kamihigashi, Takashi, 2003. "Necessity of transversality conditions for stochastic problems," Journal of Economic Theory, Elsevier, vol. 109(1), pages 140-149, March.
    5. Takashi Kamihigashi, 2002. "A simple proof of the necessity of the transversality condition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 20(2), pages 427-433.
    6. Dapeng Cai & Takashi Gyoshin Nitta, 2012. "Transversality Conditions for Stochastic Higher-Order Optimality: Continuous and Discrete Time Problems," Papers 1203.3869, arXiv.org.
    7. Ravi Kashyap, 2016. "Solving the Equity Risk Premium Puzzle and Inching Towards a Theory of Everything," Papers 1604.04872, arXiv.org, revised Sep 2019.
    8. Martin Barbie, 2015. "Miao, Jianjun: Economic dynamics in discrete time," Journal of Economics, Springer, vol. 116(3), pages 271-274, November.

    More about this item

    Keywords

    Transversality condition; Dynamic optimization.;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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