On Learning and Growth
AbstractWe study the effect of learning on optimal growth. We first derive the Euler equation. We then consider the case of iso-elastic utility and linear production, for general distributions of the random shocks and beliefs (i.e., there is no conjugate priors) and for any horizon. We show how learning alters the dynamic maximization problem and we characterize the unique optimal solution for finite and infinite horizons. We then compare the growth model in a learning environment with the deterministic and stochastic models.
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Bibliographic InfoPaper provided by CIRPEE in its series Cahiers de recherche with number 1336.
Date of creation: 2013
Date of revision:
Brock-Mirman environment; Dynamic programming; Learning; Optimal growth;
Find related papers by JEL classification:
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- D9 - Microeconomics - - Intertemporal Choice
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-11-02 (All new papers)
- NEP-DGE-2013-11-02 (Dynamic General Equilibrium)
- NEP-FDG-2013-11-02 (Financial Development & Growth)
- NEP-MAC-2013-11-02 (Macroeconomics)
- NEP-ORE-2013-11-02 (Operations Research)
- NEP-UPT-2013-11-02 (Utility Models & Prospect Theory)
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