title: Recursive Methods in Economic Dynamics
author:  Nancy L. Stokey 
description: The book is a tour de force. The authors present a unified approach to the techniques and applications of recursive economic theory. The presentations of discrete-time dynamic programming and of Markov processes are authoritative. There is a wide-ranging series of examples drawn from all branches of the discipline, but with special emphasis on macroeconomics. In the short run, the book will be a vital reference in any advanced course in macroeconomic theory. In the long run, it may help to remove the traditional boundaries between microeconomic theory and macroeconomic theory.<b><i></i></b><b>Andrew Caplin, Columbia University</b><br /><br />This book is a wonderful collection of results on the techniques of dynamic programming with great applications to economics written by giants in the field.<b><i></i></b><b>Sanford J. Grossman, University of Pennsylvania</b><br /><br />A magnificent work that is bound to have immense influence on the ways economists think about dynamic systems for many years to come. My own guess is that this book will eventually acquire the stature, say, of Hickss <i>Value and Capital</i> or Samuelsons <i>Foundations</i>.<b><i></i></b><b>Thomas J. Sargent, The Hoover Institution</b>
zlib_text: Recursive Methods 
  in Economic Dynamics 
  NANCY L. STOKEY 
  AND 
  ROBERT E. LUCAS, JR. 
  with Edward C. Prescott 
  Harvard University Press 
  Cambridge, Massachusetts, and London, England 
  
  Copyright C 1989 by the President and Fellows of Harvard College 
  All rights reserved 
  Printed in the United States of America 
  Fifth printing, 1999 
  This book is printed on acid-free paper, and its binding materials 
  have been chosen for strength and durability. 
  Library of Congress Cataloging-in-Publication Data 
  Stokey, Nancy L. 
  Recursive methods in economic dynamics / Nancy L. Stokey and 
  Robert E. Lucas, Jr., with the collaboration of Edward C. Prescott. 
  p. 
  cm. 
  Bibliography: p. 
  Includes index. 
  ISBN 0-674-75096-9 (alk. paper) 
  1. Economics, Mathematical. 2. Dynamic programming. I. Lucas, 
  Robert E. 
  II. Prescott, Edward C. 
  III. Title. 
  HB135.S7455 
  1989 
  88-37681 
  330' .0 l '51-dc 19 
  CIP 
  Univerwa Kar/ova V p 
  CERGE 
  raze 
  P I l I 2 l Praha I 
  O/lf1cl(ych vezfiu 7 
  To our parents 
  
  Preface 
  Th