An economic application of the Dubovitskii–Milyutin version of the Maximum Principle

The Pontryagin Maximum Principle is well known in economics. There is a different and more general version of the Maximum Principle, first established by Dubovitskii and Milyutin, which is little known in economics and has never been applied to solve an economic optimal control problem. This paper introduces the Dubovitskii–Milyutin version of the Maximum Principle to economics and offers an economic application to illustrate the limitation of the conventional Maximum Principle and the usefulness of the Dubovitskii–Milyutin version. The Dubovitskii–Milyutin Maximum Principle should be an integral part of the economist's toolbox and be included in economics textbooks on dynamic optimization.