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Robust Turnpikes Deduced by the Minimum-Time Needed toward Economic Maturity

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  • Darong Dai

    () (Texas A&M University, College Station, Department of Economics, United States)

Abstract

In the paper, a one-sector neoclassical model with stochastic growth has been constructed. The major goal of the study is to characterize relevant mathematical properties of efficient development paths for underdeveloped economies. Since economic maturity is a reasonable objective, we mainly focus on the long-run features of economic development. Indeed, the notion of economic maturity is well-defined in the model, and also a thorough characterization of the minimum time needed toward economic maturity is offered with intuitive interpretations discussed. Moreover, it is confirmed that the capital-labor ratio corresponding to the state of economic maturity provides us with a robust turnpike of the optimal path of capital accumulation.

Suggested Citation

  • Darong Dai, 2015. "Robust Turnpikes Deduced by the Minimum-Time Needed toward Economic Maturity," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 9(1), pages 049-073, October.
  • Handle: RePEc:fau:aucocz:au2015_049
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    References listed on IDEAS

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    More about this item

    Keywords

    Stochastic growth; economic maturity; minimum-time objective; asymptotic turnpike theorem; neighborhood turnpike theorem; robustness;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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