Calculus of variations
Abstract
It is highly suggested reading this chapter together with the classical textbook by Alpha Chiang, Elements of Dynamic Optimization, which would represent a necessary theoretical prerequisite. This chapter is divided into three parts: 1. From Sections 9.1–9.4, you will see what is a functional, the simplest problem of Calculus of Variations (CoV) and how this can be discretized (simple examples will be provided) and solved via the Lagrange multipliers technique. The Excel Generalized Reduced Gradient Solver will be used to solve these problems. 2. The second part goes from Sections 9.5–9.10 and includes some of the most used applications of CoV to the economic problems. 3. The last part of this ...
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