Lagrange multiplier vs value function
Posted: Sat Jun 05, 2010 7:44 amHello.
I was wondering if anyone knows, why when deriving first order conditions (for example for households) in a DSGE model, in papers lagrangean multiplier method is used and not value function. Is there any problem with this? Can anyone recommend me any paper on this issue?
Thank you all.
I was wondering if anyone knows, why when deriving first order conditions (for example for households) in a DSGE model, in papers lagrangean multiplier method is used and not value function. Is there any problem with this? Can anyone recommend me any paper on this issue?
Thank you all.