Mitra, Tapan ; Ray, Debraj ; Roy, Rahul (1991) The economics of orchards: an exercise in point-input, flow-output capital theory Journal of Economic Theory, 53 (1). pp. 12-50. ISSN 0022-0531
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Official URL: http://www.sciencedirect.com/science/article/pii/0...
Related URL: http://dx.doi.org/10.1016/0022-0531(91)90141-P
Abstract
This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are "small" when the discount factor is "close" to unity
| Item Type: | Article |
|---|---|
| Source: | Copyright of this article belongs to Elsevier Science. |
| ID Code: | 72293 |
| Deposited On: | 29 Nov 2011 11:23 |
| Last Modified: | 29 Nov 2011 11:23 |
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