There is a strong correlation between the corporate interest rate spread and the unemployment rate.We make two contributions to the literature based on this observation. First, we model the mechanisms by which these financial conditions can affect unemployment in a DMP model with capital....

We bring together the theories of duality and dynamic programming. We show that the dual of a separable dynamic optimization problem can be recursively decomposed. We provide a dual version of the principle of optimality and give conditions under which the dual Bellman operator is a contraction...