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Solving the non-convexity problem in some shopping-time and human-capital models

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  • Cysne, Rubens Penha

Abstract

Several works in the shopping-time and in the human-capital literature, due to the nonconcavity of the underlying Hamiltonian, use Örst-order conditions in dynamic optimization to characterize necessity, but not su¢ ciency, in intertemporal problems. In this work I choose one paper in each one of these two areas and show that optimality can be characterized by means of a simple aplication of Arrowís (1968) su¢ ciency theorem.

Suggested Citation

  • Cysne, Rubens Penha, 2004. "Solving the non-convexity problem in some shopping-time and human-capital models," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 567, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:567
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    References listed on IDEAS

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    3. Cysne, Rubens Penha & Maldonado, Wilfredo Fernando Leiva & Monteiro, P. K., 2004. "Inflation and income inequality: a shopping-time aproach: (Forthcoming, Journal of Development Economics)," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 566, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    4. William J. Baumol, 1952. "The Transactions Demand for Cash: An Inventory Theoretic Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 66(4), pages 545-556.
    5. Cysne, Rubens P, 2003. "Divisia Index, Inflation, and Welfare," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(2), pages 221-238, April.
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    7. Antonio Ladrón-de-Guevara & Salvador Ortigueira & Manuel S. Santos, 1999. "A Two-Sector Model of Endogenous Growth with Leisure," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(3), pages 609-631.
    8. Lucas, Robert E, Jr, 1990. "Supply-Side Economics: An Analytical Review," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 293-316, April.
    9. V. V. Chari & Larry E. Jones & Rodolfo E. Manuelli, 1995. "The growth effects of monetary policy," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 19(Fall), pages 18-32.
    10. Rosen, Sherwin, 1976. "A Theory of Life Earnings," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 45-67, August.
    11. Cysne, Rubens P. & Maldonado, Wilfredo L. & Monteiro, Paulo Klinger, 2005. "Inflation and income inequality: A shopping-time approach," Journal of Development Economics, Elsevier, vol. 78(2), pages 516-528, December.
    12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Fernando de Holanda Barbosa, 2017. "Competitive Equilibrium Hyperinflation Under Rational Expectations," SpringerBriefs in Economics, in: Exploring the Mechanics of Chronic Inflation and Hyperinflation, chapter 0, pages 77-91, Springer.
    2. Fabio Araujo & Joao Victor Issler, 2005. "Estimating the Stochastic Discount Factor without a Utility Function," Computing in Economics and Finance 2005 202, Society for Computational Economics.
    3. Cysne, Rubens Penha, 2006. "An intra-household approach to the welfare costs of inflation (Revised Version, Forthcoming 2006, Estudos Econômicos)," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 612, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    4. Barbosa, Fernando de Holanda, 2005. "The contagion effect of public debt on monetary policy: the brazilian experience," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 591, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    5. Athayde, Gustavo M. de & Flôres Junior, Renato Galvão, 2004. "Do higher moments really matter in portfolio choice?," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 574, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    6. Horowitz, Andrew W. & Flôres Junior, Renato Galvão, 2004. "Beyond indifferent players: on the existence of prisoners dilemmas in games with amicable and adversarial preferences," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 576, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    7. Aloisio Araujo & Luciano I. de Castro Filho, 2004. "Pure Strategy Equilibria of Multidimensional and Non-Monotonic Auctions," Econometric Society 2004 Latin American Meetings 300, Econometric Society.

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