I'd just qualify this by saying that Michael's "set of dynamic shadow prices" is a measure of the short run sacrifice for the sake of the long run benefit. Or, more precisely, for the sake of a benefit on the next date, where the same dilemma will need to be faced.
On 6/22/05, Daniel Davies <[EMAIL PROTECTED]> wrote: > to join two threads, some similar principle to this is why Wall Street > doesn't typically have a lot of time for companies that claim a need to > sacrifice profitability "in the short term" for the good of long term > investments! > > -----Original Message----- > From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of Robert > Scott Gassler > Sent: 22 June 2005 16:22 > To: [email protected] > Subject: Re: "No cut in pay" > > > I remember reading Michael Intriligator's book on optimization a long time > ago. Its chapter on "the maximum principle" of dynamic optimization or > something said that if you are on the optimum long-run path, all you need > to do is optimize in the short run. If not, not. That suggested to me that > what is good in the long run has to be good in the short. Less possibility > for detours into evil in the name of eventual good. > 32.2.629.27.15 >
