Delay equivalence in capital accumulation models
Abstract We study delays in capital accumulation models. Our contribution is threefold. First, we identify a class of models that can be transformed into standard optimal control models without delay. Second, in the single state versions of these models the state trajectory is monotonic in the optimal solution. This is noteworthy given the common belief that adding delays facilitates oscillatory behavior of capital, output and investment. Third, we identify an equivalence result between time-to-install/deliver problems and time-to-build problems.
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- Mauro BAMBI & Giorgio FABBRI & Fausto GOZZI, 2010.
"Optimal policy and consumption smoothing effects in the time-to-build AK model,"
Discussion Papers (IRES - Institut de Recherches Economiques et Sociales)
2010029, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- M. Bambi & G. Fabbri & F. Gozzi, 2012. "Optimal policy and consumption smoothing effects in the time-to-build AK model," Economic Theory, Springer, vol. 50(3), pages 635-669, August.
- Bambi, Mauro & Fabbri, Giorgio & Gozzi, Fausto, 2009. "Optimal policy and consumption smoothing effects in the time-to-build AK model," MPRA Paper 17128, University Library of Munich, Germany.
- Jess Benhabib & Aldo Rustichini, 1990.
"Vintage Capital, Investment and Growth,"
886, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Hartl, Richard F., 1987. "A simple proof of the monotonicity of the state trajectories in autonomous control problems," Journal of Economic Theory, Elsevier, vol. 41(1), pages 211-215, February.
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