What are FOCs and SOCs? - Economics Stack Exchange
Jan 22, 2015 · For example when you are talking about profit maximization starting from a profit function $\pi (q)$, the main condition for a maximum is that: $$\frac {\partial \pi} {\partial …
Deriving the Euler Equation - Economics Stack Exchange
Sep 4, 2015 · Now to get the Euler equation: If you take the derivative of that with respect to K_t+1 you will get your FOC there. (This is the FOC for the whole Lagrangian, because the …
Second Order Condition - Always means second derivative?
Apr 7, 2023 · In optimisation, does First Order Condition (FOC) always mean a condition for a max/min related to the first derivative. Similarly, is Second Order Condition (SOC), called …
FOCs for profit maximization using a transformation function
Nov 24, 2023 · Usually when you do constrained optimization under inequality constraints, you get inequalities for the FOCs as well (e.g. (5.C.2) on p. 137, where the authors study the …
mathematical economics - Solving a HJB with additional …
Jul 21, 2020 · I am trying to solve a Hamiltonian-Jacobi-Bellman equation with additional constraints on the state and control variables, but I am a bit confused on how to do that. In …
Jordi Gali Euler Equation Beta - Economics Stack Exchange
Jan 22, 2017 · Jordi Gali book, page 42 There is no explanation gali book the notes which are prepared by Drago Bergholt (Page 6) explain FOC for "Ct" (2.13) and (2.18) explain Euler …
Optimization problem with Kuhn-Tucker conditions
FOC: $\frac {\partial L} {\partial \lambda} = c_i + s_i - (T - s_i)w = 0$ $\frac {\partial L} {\partial s_i} = a s_i^ {a-1} c_i^ {1-a} - \lambda (1+w) +\mu = 0$ $\frac {\partial L} {\partial c_i} = (1-a) s_i^a …
optimization - Solving the following cost minimization problem …
Oct 20, 2021 · I am currently getting my Masters in Economics. I did not get any exposure to optimization with inequality constraints in my undergrad. I would like to ensure that I am doing …
Solving a HJB with a probability to transit to a new state
Jul 8, 2020 · Hamiltonain is a physics concept and you are not even applying it correctly. Are you forced to do this? You could simply take the current utility function and integrate over time, …
setting of Lagrangian function - Economics Stack Exchange
Dec 20, 2020 · The general KKT theorem says that the Lagrangian FOC is a necessary condition for local optima where constraint qualification holds. When the objective function is concave or …