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Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model

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  • Akao, Ken-Ichi
  • Kamihigashi, Takashi
  • Nishimura, Kazuo

Abstract

We show that the critical capital stock of the Dechert and Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 47 (2011)
Issue (Month): 6 ()
Pages: 677-682

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Handle: RePEc:eee:mateco:v:47:y:2011:i:6:p:677-682

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Web page: http://www.elsevier.com/locate/jmateco

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  1. Kamihigashi, Takashi & Roy, Santanu, 2007. "A nonsmooth, nonconvex model of optimal growth," Journal of Economic Theory, Elsevier, vol. 132(1), pages 435-460, January.
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Cited by:
  1. Cuong Le Van & Cagri Saglam & Agah Turan, 2014. "Optimal Growth Strategy Under Dynamic Threshold," Working Papers 2014-123, Department of Research, Ipag Business School.

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