On high-order differentiability of the policy function

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This note presents some results concerning high-order differentiability of the policy function. It is shown that simple examples of cubic return functions may yield optimal policies which under standard conditions are not differentiable to high order. The loss of differentiability, however, is not robust to small perturbations of the model. For instance, monotone policy functions are almost always high-order differentiable.

Original languageEnglish (US)
Pages (from-to)565-570
Number of pages6
JournalEconomic Theory
Issue number3
StatePublished - Sep 1993
Externally publishedYes


ASJC Scopus subject areas

  • Economics and Econometrics

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