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A multidimensional, nonconvex model of optimal growth

Author

Listed:
  • Stefano Bosi

    (Université Paris-Saclay, Univ Evry, EPEE)

  • Thai Ha-Hui

    (Université Paris-Saclay, Univ Evry, EPEE)

Abstract

In this article, we consider a multidimensional economy where the standard supermodularity property fails. We generalize the notion of net gain of investment, introduced by Kamihigashi and Roy [7] and applied to one-sector growth models, to the case of multiple capital stocks. We prove the convergence to the set of steady states without relying on the monotonicity of optimal path. Our approach differs from the standard dynamic programming based on convexity or supermodularity. We find that preferences are key to shape the economy in the long run.

Suggested Citation

  • Stefano Bosi & Thai Ha-Hui, 2023. "A multidimensional, nonconvex model of optimal growth," Documents de recherche 23-07, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:23-07
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    More about this item

    Keywords

    net gain of investment; multidimensional economy; nonconvexities;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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