Optimal accumulation in a small open economy with technological uncertainty
AbstractThis paper analyzes the optimal allocation problem of a small trading country facing an uncertain technology. It is involved in production of many commodities. Differentiability cannot be guaranteed, hence, the Ramsey-Euler condition of optimality needs to be modified. From the optimality criterion, we derive a pair of conditions, which does not require differentiability. If "enough" uncertainty is allowed, the sequence of the distribution functions of investment expenditure converges uniformly to a unique invariant measure. In addition to the weak convergence of the stochastic process of investment expenditure we also have the sequences of the stochastic process of investment expenditure converging weakly.
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Bibliographic InfoArticle provided by Springer in its journal Economic Theory.
Volume (Year): 13 (1999)
Issue (Month): 1 ()
Note: Received: September 8, 1994; revised version: September 25, 1997
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Web page: http://link.springer.de/link/service/journals/00199/index.htm
Other versions of this item:
- Manjira Datta, . "Optimal Accumulation in a Small Open Economy with Technological Uncertainty," Working Papers 2132840, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Manjira Datta, . "Optimal Accumulation in a Small Open Economy With Technological Uncertainty," Working Papers 97/9, Arizona State University, Department of Economics.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D90 - Microeconomics - - Intertemporal Choice - - - General
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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