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Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model

  • Akao, Ken-Ichi
  • Kamihigashi, Takashi
  • Nishimura, Kazuo

We show that the critical capital stock of the Dechert and Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.

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Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 47 (2011)
Issue (Month): 6 ()
Pages: 677-682

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Handle: RePEc:eee:mateco:v:47:y:2011:i:6:p:677-682
Contact details of provider: Web page: http://www.elsevier.com/locate/jmateco

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  1. Manh Hung Nguyen & Cuong Le Van & Philippe Michel, 2005. "Non-convex aggregative technology and optimal economic growth," Cahiers de la Maison des Sciences Economiques b05095, Université Panthéon-Sorbonne (Paris 1).
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  8. Dechert, W. Davis & Nishimura, Kazuo, 1983. "A complete characterization of optimal growth paths in an aggregated model with a non-concave production function," Journal of Economic Theory, Elsevier, vol. 31(2), pages 332-354, December.
  9. Haunschmied, J.L. & Feichtinger, G. & Hartl, R.F. & Kort, P.M., 2005. "Keeping up with the technology pace : a DNS-curve and limit cycle in a technology investment decision problem," Other publications TiSEM e656c1f0-c869-4ee6-b49b-2, Tilburg University, School of Economics and Management.
  10. Mukul Majumdar & Manfred Nermuth, 1982. "Dynamic Optimization in Non-Convex Models with Irreversible Investment: Monotonicity and Turnpike Results (Now published in Zeitschrift für National-Ökonomie (Journal of National Economics), vol.42, N," STICERD - Theoretical Economics Paper Series 40, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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