economic history - Beijer https://beijer.kva.se Just another WordPress site Thu, 15 Sep 2022 13:31:07 +0000 en-US hourly 1 Envelope theo­rems in economics: Historical development and modern cost-benefit applications https://beijer.kva.se/publication/envelope-theorems-in-economics-historical-development-and-modern-cost-benefit-applications/ Thu, 15 Sep 2022 13:29:13 +0000 https://beijer.kva.se/?post_type=publication&p=3807 This paper reviews some historical development and modern applications of the envelope theorems in economics from a static to a dynamic context. First, we show how the static version of the theorem surfaced in economics, which had eventually lead to the well-known Shephard’s lemma in microeconomics. Second, we present its dynamic version in terms of the classical calculus of variations and optimal control theory via...

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]]> This paper reviews some historical development and modern applications
of the envelope theorems in economics from a static to a dynamic context. First, we
show how the static version of the theorem surfaced in economics, which had eventually lead to the well-known Shephard’s lemma in microeconomics. Second, we
present its dynamic version in terms of the classical calculus of variations and optimal
control theory via the optimized Hamiltonian function. Third, we show some applications of the theorem for deriving dynamic cost-benefit rules with special reference to environmental projects involving the green or comprehensive net national product(CNNP). Finally, we illustrate how to extend the cost-benefit rules to a stochastic economic growth setting.

The post Envelope theo­rems in economics: Historical development and modern cost-benefit applications first appeared on Beijer.

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