1. Dr. Keshab R Bhattarai Business School, University of Hull
Dynamic Programming in Economic Models Neoclassical Growth Model Bellman Equation
Dr. Keshab R Bhattarai
Business School, University of Hull

2. Neo-classical Growth Model: Current Value Hamiltonian
Keshab Bhattarai

3. Optimality and Boundary Conditions
Keshab Bhattarai

4. Characterisation of the Balanced Growth Path
Keshab Bhattarai

5. Transitional Dynamics-1 Transitional Dynamics-1
Keshab Bhattarai

6. Transitional Dynamics-2
Keshab Bhattarai

7. Transitional Dynamics-2
Keshab Bhattarai

8. Saddle Point Solution
Keshab Bhattarai

9. Brock-Mirman(1972)dynamic programming problem
Bellman’s Equations
Subject to
Value function
Keshab Bhattarai

10. First and Second Iteration of the Value function
Solution by Iteration
First and Second Iteration of the Value function
Keshab Bhattarai

11. Third Iteration of the Value function
Keshab Bhattarai

12. Fourth Iteration of the Value function
Keshab Bhattarai

13. Limits of the Value Function in Infinite Iterations
Keshab Bhattarai

14. Limits of the Value Function in Infinite Iterations
Keshab Bhattarai

15. References
Bellman, R (1957) Dynamic Programming, Princeton University Press.
Brock W and L Mirman (1972) Optimal Economic Growth and Uncertainty: the Discounted Case, Journal of Economic Theory 4(3):
Cass, D. (1965): Optimum Growth in Aggregative Model of Capital Accumulation, Review of Economic Studies, 32:
Ljungqvist L and T.J. Sargent (2000), Recursive Macroeconomic theory, MIT Press
Parente S.L.(1994) Technology Adoption, Learning-by-Doing, and Economic Growth, Journal of Economic Theory, 63, pp
Sargent TJ (1987) Dynamic Macroeconomic Theory, Chapter 1, Harvard University Press.
Solow, R.M. (1956) “A Contribution to the Theory of Economic Growth.” Quarterly Journal of Economics 70,
Stokey, N. L. and R.E. Lucas (1989) Recursive Methods in Economic Dynamics, Harvard UP, Cambridge, MA.
Uzawa, H. (1962) “On a Two-Sector Model of Economic Growth,” Review of Economic Studies 29,
Keshab Bhattarai