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Stochastic Versions of Turnpike Theorems in the Sense of Uniform Topology

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  • Dai, Darong
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    Abstract

    In this paper, a stochastic endogenous aggregative growth model is constructed and two main results are established, based on endogenous horizon of the economy and endogenous terminal capital stock, which is also efficient capital accumulation in some sense. First, strong turnpike theorems under uncertainty and in the sense of uniform topology are obtained; second, inefficacy of temporary fiscal policy, which is chosen to be capital income taxation, has been demonstrated in comparatively weak conditions different from Yano (1998)’s.

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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40216.

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    Date of creation: 26 Apr 2011
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    Handle: RePEc:pra:mprapa:40216

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    Keywords: Stochastic endogenous growth; Uniform-topology turnpike theorems; Endogenous terminal stock; Endogenous welfare function; Capital income taxation;

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    1. Araujo, A & Scheinkman, Jose A, 1977. "Smoothness, Comparative Dynamics, and the Turnpike Property," Econometrica, Econometric Society, vol. 45(3), pages 601-20, April.
    2. Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
    3. Coles, Jeffrey Link, 1985. "Equilibrium Turnpike Theory with Constant Returns to Scale and Possible Heterogeneous Discount Factors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 671-79, October.
    4. Liutang Gong & Heng-fu Zou, 2003. "Fiscal Federalism, Public Capital Formation, and Endogenous Growth," Annals of Economics and Finance, Society for AEF, vol. 4(2), pages 471-490, November.
    5. Merton, Robert C, 1975. "An Asymptotic Theory of Growth under Uncertainty," Review of Economic Studies, Wiley Blackwell, vol. 42(3), pages 375-93, July.
    6. Sergio Rebelo, 1999. "Long Run Policy Analysis and Long Run Growth," Levine's Working Paper Archive 2114, David K. Levine.
    7. Liutang Gong & Heng-fu Zou, 2000. "Foreign Aid Reduces Domestic Capital Accumulation and Increases Foreign Borrowing: A Theoretical Analysis," Annals of Economics and Finance, Society for AEF, vol. 1(1), pages 147-163, May.
    8. Bewley, Truman, 1982. "An integration of equilibrium theory and turnpike theory," Journal of Mathematical Economics, Elsevier, vol. 10(2-3), pages 233-267, September.
    9. Philippe Aghion, 2004. "Growth and Development: A Schumpeterian Approach," Annals of Economics and Finance, Society for AEF, vol. 5(1), pages 1-25, May.
    10. Yano, Makoto, 1984. "Competitive Equilibria on Turnpikes in a McKenzie Economy, I: A Neighborhood Turnpike Theorem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(3), pages 695-717, October.
    11. Yano, Makoto, 1985. "Competitive Equilibria on Turnpikes in a McKenzie Economy, II: An Asymptotic Turnpike Theorem," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 26(3), pages 661-69, October.
    12. McKenzie, Lionel W, 1976. "Turnpike Theory," Econometrica, Econometric Society, vol. 44(5), pages 841-65, September.
    13. McKenzie, Lionel W., 1982. "A primal route to the Turnpike and Liapounov stability," Journal of Economic Theory, Elsevier, vol. 27(1), pages 194-209, June.
    14. Yano, Makoto, 1984. "The turnpike of dynamic general equilibrium paths and its insensitivity to initial conditions," Journal of Mathematical Economics, Elsevier, vol. 13(3), pages 235-254, December.
    15. Makoto Yano, 1998. "On the Dual Stability of a von Neumann Facet and the Inefficacy of Temporary Fiscal Policy," Econometrica, Econometric Society, vol. 66(2), pages 427-452, March.
    16. Joshi, Sumit, 1997. "Turnpike Theorems in Nonconvex Nonstationary Environments," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 225-48, February.
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    Cited by:
    1. Dai, Darong, 2011. "Modeling the minimum time needed to economic maturity," MPRA Paper 40386, University Library of Munich, Germany, revised 31 Jul 2012.
    2. Dai, Darong, 2011. "Wealth Martingale and Neighborhood Turnpike Property in Dynamically Complete Market with Heterogeneous Investors," MPRA Paper 46416, University Library of Munich, Germany.
    3. Dai, Darong, 2012. "A Robust Turnpike Deduced by Economic Maturity," MPRA Paper 48818, University Library of Munich, Germany.
    4. Dai, Darong, 2012. "On the existence and stability of Pareto optimal endogenous matching with fairness," MPRA Paper 40457, University Library of Munich, Germany.
    5. Dai, Darong, 2013. "Cooperative economic growth," Economic Modelling, Elsevier, vol. 33(C), pages 407-415.
    6. Dai, Darong, 2012. "Comparative Studies on Cooperative Stochastic Differential Game and Dynamic Sequential Game of Economic Maturity," MPRA Paper 44339, University Library of Munich, Germany.

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