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University of Rhode Island — Environmental & Natural Resource Economics
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EEC 624 – Dynamic Economic Models
Course Information

Professor: Dr. Hirotsugu Uchida
Semester: Fall
Credits: 3
Prerequisites: EEC 528 or permission of instructor

Catalog Description: Fundamentals of dynamic economic theory. Dynamic optimization techniques applied to environmental and natural resource economics

Course Goals & Outcomes

This goal of this course is to have students familiarize with dynamic optimization techniques applied to environmental and natural resource economics. We will start with covering the basics of ordinary differential equations and stability, then continuing onto optimal control theory and its applications to our discipline.

This course is highly technical and mathematical by nature. For this reason, it is recommended for you to have supplemental materials in addition to the designated textbook. This course will use Caputo (2005) as the textbook. Recommended supplemental materials are Léonard and Van Long (1992) for optimal control theory, and Simon and Blume (1994) for general mathematics.

That said, this is a mathematical economics course, not a mathematics course. As such, we will not, in general, pursue the mathematics to its fullest generality, opting instead for mathematical assumptions which are less general but more useful to economists wishing to use the methods. The course will maintain its focus on economic applications and interpretations of the math; it is expected that students will develop a strong sense of bridging between math and economics. This does not mean that we will be sloppy in the proofs of theorems; quite the contrary. We will cover rigorous proofs of the theorems (or give a reference where a nice rigorous proof can be found) under useful assumptions. You will also be required to provide rigorous proofs of theorems on the problem sets and exams.

By the end of the semester students will be able to:

  • Set up and solve dynamic economic models pertinent to environmental and natural resource use
Course Syllabus

Class topics:

  • Ordinary differential equations and stability
    • Ordinary differential equations and stability
    • Introduction to ODE: Definitions and basic results
    • Systems of linear ODEs and stability
  • Systems of non-linear ODEs and stability
    • Optimal control theory
    • Introduction to optimal control theory
    • Necessary and sufficient conditions for simplified control problems
    • The Maximum Principle
    • Necessary and sufficient conditions for general class of control problems
    • Dynamic Envelope Theorem
    • Transversality conditions
    • Discounting, current values, and time consistency
    • Infinite horizon problems
    • Dynamic programming
About The Professor

Dr. Hirotsugu Uchida
Assistant Professor
Department of Environmental and Natural Resource Economics
212 Kingston Coastal Institute
Office: 401.874.2238
Fax: 401.782.4766
Email: uchida@uri.edu

Dr. Uchida is an environmental economist who specializes in natural resource economics. His current research interests are:

  • fisheries management;
  • seafood markets and ecolabel; and
  • sustainable use of ecosystem services and economic development.
Reasons To Take This Course

This course provides you with the fundamental tools to analyze the dynamic and complex problems of optimal use of environmental and natural resources.

This course is a requirement for environmental and natural resource economics graduate programs and a prerequisite for several other upper level graduate courses.

Cool Links
  • Michael Caputo is a professor at the University of Central Florida, College of Business Administration, Department of Economics.