Non-optimality of the Myopic Decision Rule: The Case of a Two-Sector Open Economy
This paper is concerned with optimal allocation of investment in a two-sector open economy with non-shiftable capital. We have assumed a stationary population and fixed terms of trade. It has been shown that, if the economy starts with a small amount of capital in each sector, the myopic decision rule under static expectations will not be compatible with the conditions of optimal in- vestment allocation.
When requesting a correction, please mention this item's handle: RePEc:ren:journl:v:4:y:2012:i:1:p:157-163. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (J. Fernando Reyes)
If references are entirely missing, you can add them using this form.