Optimal Control Theory for Undergraduates
35 Pages Posted: 7 Apr 2005
Date Written: January 2005
Dynamic optimization is widely used in financial economics, macroeconomics and resource economics. This is accounting for some tension between the undergraduate and graduate teaching of economics because most undergraduate programs still concentrate on static economic analysis. This paper shows how, with the help of the Microsoft Excel Solver tool, the principles of dynamic economics can be taught to students with minimal knowledge of calculus. As it is assumed that the reader has no prior knowledge of optimal control theory, some attention is paid to the main concepts of dynamic optimization.
JEL Classification: A22, C61, D91, D92, Q00
Suggested Citation: Suggested Citation