Optimal Firm Behaviour in the Context of Technological Progress and a Business Cycle
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Beschreibung
This thesis is a theoretical study of the optimal dynamic policies of a, to some extent, slowly adjusting firm that faces an exogeneously given technological progress and an exogeneously given business cycle. It belongs to the area of mathematical economics. It is intended to appeal to mathematical economists in the first place, economists in the second place and mathematicians in the third place. It entails an attempt to stretch the limits of the application of deterministic dynamic optimisation to economics, in particular to firm behaviour. A well-known· Dutch economist (and trained mathematician) recently stated in 1 a local university newspaper that mathematical economists give economics a bad reputation, since they formulate their problems from a mathematical point of view and they are only interested in technical, mathematical problems. At the same time, however, "profound as economists may be, when it comes to extending or modifying the existing theory to make it applicable to a certain economic problem, an understanding of optimal control theory (which is the mathematical theory used in this thesis, ovh) based solely on heuristic arguments will often turn out to be inadequate" (SydS
This book applies Optimal Control Theory to dynamic firm behaviour. In a deterministic context, the optimal investment and financing policy of a firm which is confronted with technological progress or with a fluctuating demand is studied. A new version of the Maximum Principle is derived in order to handle vintage models. Special attention is given to the shadow price interpretations and the (de-)merits of optimisation models of firm behaviour.
Autor*in
Onno van Hilten
Themen in »Optimal Firm Behaviour in the Context of Technological Progress and a Business Cycle«
Financing Finanzierungspolitik Investionspolitik Investment Konjunkturzyklen Technologischer Fortschritt business cycle dynamic firm behaviour maximum principle optimal control optimization technological process theory of the firm