According to my textbook, the analytical technique for solving a Bellman's Equation is as follows:
- Guess a form for $V_0(x)$
Solve the maximization problem with respect to the control and obtain a policy function x′=h0(x)
Update the guess by plugging the policy function such that $V1(x)=F(x,h0(x))+\beta V0(h0(x))$
Repeat the above until $V_{i+1}=V_i$ At this point, the equation is solved.
My question is, why does this technique, specifically the step, $V_{i+1}=V_i $, solve the Bellman equation? Thanks!