Section 1 Study Problems: September 19

Problem	Important general concepts
Problem 1: Dynamic programming and a neoclassical model of capital formation PDF of problem	Dynamic programming is a recursive (iterative) procedure in which a value and policy function is constructed at each step. The problem studies a simple example in which both can be constructed in closed form. It is also possible to determine that the limit of a series of iterations is the same (value, policy) function that would be determined directly from the infinite horizon value function.
Problem 2: Dynamic programming and labor market search PDF of problem	Dynamic programming can be applied to decision problems in which the choice (control) set is discrete, rather than continuous State evolution and controls are then a discrete Markov process (Markov chain)
Problem 3: Dynamic programming and particular non-time separable preferences PDF of poblem	If the departures from time separability in and objective can be cast in a recursive form, then dynamic programming can be applied. For smooth dynamic programs, the FOCs and ETs can be calculated, even if an analytical solution can be found