Linearization: Difference between revisions

Revision as of 17:37, 21 May 2021

Revision as of 23:33, 31 August 2021

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===Microeconomics===

In [[microeconomics]], [[decision rule]]s may be approximated under the state-space approach to linearization.<ref name="statespace">Moffatt, Mike. (2008) [[About.com]] ''[http://economics.about.com/od/economicsglossary/g/statespace.htm State-Space Approach]'' Economics Glossary; Terms Beginning with S. Accessed June 19, 2008.</ref> Under this approach, the [[Euler equations (fluid dynamics)#LinearizedConservation form|Euler equations]] of the [[utility maximization problem]] are linearized around the stationary steady state.<ref name="statespace"/> A unique solution to the resulting system of dynamic equations then is found.<ref name="statespace"/>

===Optimization===