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Modeling the minimum time needed to economic maturity

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  • Dai, Darong
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    Abstract

    A general equilibrium model has been constructed in a stochastic endogenous growth economy driven by an Ito-Levy diffusion process. The minimum time to “economic maturity” for an underdeveloped economy has been computed both in the preference manifold of the modified Ramsey fashion and in that of the modified Radner fashion with its support, i.e., fiscal policies and savings strategy, endogenously determined. Furthermore, the effects of different information structures to the endogenous time have been thoroughly investigated, and local sensitivity analyses of optimal consumption per capita with respect to the initial level of capital stock per capita have been smoothly incorporated into the current macroeconomic model.

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    File URL: http://mpra.ub.uni-muenchen.de/40386/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40386.

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    Date of creation: 01 Oct 2011
    Date of revision: 31 Jul 2012
    Handle: RePEc:pra:mprapa:40386

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    Keywords: Stochastic endogenous growth; Minimum time to “economic maturity”; Optimal taxation policies; Endogenous savings rate; Preference manifold; Information structure; Local sensitivity analyses; Optimal stopping time; Levy diffusion;

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    Cited by:
    1. Darong Dai, 2013. "Wealth Martingale and Neighborhood Turnpike Property In Dynamically Complete Market With Heterogeneous Investors," Economic Research Guardian, Weissberg Publishing, Weissberg Publishing, vol. 3(2), pages 86-110, December.

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