The central economic problem of optimal allocation of scarce resources having alternative uses, at a point of time and over time, involves both static and dynamic optimization. The choice between less consumption now and more later—between short-term pain and long-term gain—is a dynamic optimization problem. So is the allocation of investment among the various sectors over the whole economic planning period.
KeywordsAdmissible Control Terminal Time Dynamic Optimization Problem Observability Problem Bolza Problem
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