A Model of Optimal Growth Strategy
AbstractIn this paper we present an optimal growth model with convex-concave technology, for an open developing country. The latter may choose to produce consumption goods by borrowing on capital markets. We prove there exists two non trivial steady states. An optimal path converges either to 0 or to the high stedy-state. That depends on the levels of the initial debt and/or of the debt constraint. We prove also there exists a poverty trap if the time preference is very high.
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Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 97-27.
Length: 37 pages
Date of creation: 1997
Date of revision:
Publication status: Published in Journal of Economic Theory, 1999, vol. 85, no. 1, pp. 27-54
ECONOMIC DEVELOPMENT ; ECONOMETRICS;
Other versions of this item:
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
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