The "Eating up Assumption", Transversality Conditions, and Steady States for Discrete Time Infinite Horizon Problems

Abstract

In this paper, we consider how to construct the optimal solutions for a general discrete time infinite horizon optimal control problem. We establish necessary and sufficient conditions for optimality in the sense of a modified optimality criterion. We also consider how transversality conditions are related to steady states. The results are applied to two examples to demonstrate how the new transversality conditions derived in this paper differ from those given in the previous literature.

References in corpus (2)

• Constructing the Optimal Solutions to the Undiscounted Continuous-Time Infinite Horizon Optimization Problems
• Limit of the Solutions for the Finite Horizon Problems as the Optimal Solution to the Infinite Horizon Optimization Problems