Mathematics for Economists

Calculus of variations

The transversality condition is

0 = Fx^0



1 ,x( 1 ),x( 1 )



=



t+ 2 x



( 1 )=

=



1 + 2



t

2

+C

2



( 1 )=



1 2



1

2

+C

2



that isC= 0.