The Bellman Equation | Macro Struggle

Macro Struggle | The Bellman Equation: In this video I use a Sequential Market Equilibrium to demonstrate how to formulate a Bellman Equation, how to interpret a Bellman Equation, and how to use a Bellman Equation to more easily derive First Order Conditions and the Euler Equation. Timestamps: 0:00 - Intro 0:28 - Review of Sequential Market Equilibrium 1:30 - Forming a Bellman Equation 3:00 - Taking FOCs of a Bellman Equation 4:10 - Confirming Bellman Equation FOC Equals Original FOC