The Riccati Equation - An Economic Fundamental Equation which Describes Marginal Movement in Time
The objective of this article is to demonstrate that the Riccati equation is an economic fundamental equation, which is marginally descriptive in time for the large majority of economic systems. It is also an objective to interpret the Riccati equation and the corresponding relations in terms of eco...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Norwegian Society of Automatic Control
2006-01-01
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| Series: | Modeling, Identification and Control |
| Subjects: | |
| Online Access: | http://www.mic-journal.no/PDF/2006/MIC-2006-1-1.pdf |
| Summary: | The objective of this article is to demonstrate that the Riccati equation is an economic fundamental equation, which is marginally descriptive in time for the large majority of economic systems. It is also an objective to interpret the Riccati equation and the corresponding relations in terms of economics. The article shows that there is a close relationship between the marginal Hamiltonian function and the Riccati equation. The marginal Hamiltonian function will be an expression of the accounts based on optimal behaviour including both the change in result and the change in balance. |
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| ISSN: | 0332-7353 1890-1328 |