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Intertemporal Complementarity and Optimality: A Study of a Two-Dimensional Dynamical System

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  • Kazuo Nishimura
  • Tapan Mitra

Abstract

We study the underlying structure of the two-dimensional dynamical system generated by a class of dynamic optimization models, which allow for intertemporal complementarily between adjacent periods, but which preserve the time additively separable framework of Ramsey models. Specifically, we identify conditions under which the results of the traditional Ramsey type theory are preserved even when the intertemporal independence assumption is relaxed. Local analysis of this theme has been presented by Samuelson (1971). We establish global convergence results and relate them to the local analysis, by using the mathematical theory of two-dimensional dynamical syste

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 543.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:feam04:543

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Keywords: intertemporal complementarity; supermodularity; monotonicity; turnpike property;

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Cited by:
  1. repec:hal:cesptp:halshs-00101361 is not listed on IDEAS
  2. Olivier Bruno & Cuong Le Van & Beno�t Masquin, 2008. "When Does a Developing Country Use New Technologies?," Working Papers 12, Development and Policies Research Center (DEPOCEN), Vietnam.
  3. Goenka, Aditya & Nguyen, Manh-Hung, 2009. "Existence of Competitive Equilibrium in an Optimal Growth Model with Elastic Labor Supply and Smoothness of the Policy Function," TSE Working Papers 09-064, Toulouse School of Economics (TSE).
  4. Hiraguchi, Ryoji, 2011. "A two sector endogenous growth model with habit formation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 430-441, April.

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