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“Very strong” turnpike effect in a non-stationary Gale economy with investments, multilane turnpike and limit technology

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  • Panek Emil

    (1 University of Zielona Góra, Institute of Economics and Finance, ul. Podgórna 50, 65-246, Zielona Góra, Poland)

Abstract

This article presents a multiproduct model of a non-stationary Gale-type economy with technology convergent to a certain limit technology, in which changes in the production technology (the dynamics of Gale production spaces) are governed by the size of investments. Thus, this model differs from the vast majority of Gale-type models considered in mathematical economy. With this assumption, the so-called “very strong” version of the multilane production turnpike theorem in the Gale economy with investments is proved. According to the theorem, if the optimal growth process in such an economy reaches the multilane turnpike, it remains on it from then on, with the possible exception of the last period of the economic horizon being analysed.

Suggested Citation

  • Panek Emil, 2023. "“Very strong” turnpike effect in a non-stationary Gale economy with investments, multilane turnpike and limit technology," Economics and Business Review, Sciendo, vol. 9(4), pages 5-24, December.
    • Handle: RePEc:vrs:ecobur:v:9:y:2023:i:4:p:5-24:n:8
    DOI: 10.18559/ebr.2023.4.891
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    References listed on IDEAS

    as
    1. Majumdar, Mukul, 2009. "Equilibrium and optimality: Some imprints of David Gale," Games and Economic Behavior, Elsevier, vol. 66(2), pages 607-626, July.
    2. Darong DAI & Kunrong SHEN, 2013. "A turnpike theorem involving a modified Golden Rule," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(11(588)), pages 25-40, November.
    3. repec:agr:journl:v:11(588):y:2013:i:11(588):p:25-40 is not listed on IDEAS
    4. Alexander J. Zaslavski, 2015. "Turnpike Theory of Continuous-Time Linear Optimal Control Problems," Springer Optimization and Its Applications, Springer, edition 127, number 978-3-319-19141-6, September.
    5. Cartigny, Pierre & Venditti, Alain, 1994. "Turnpike theory : Some new results on the saddle point property of equilibria and on the existence of endogenous cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 18(5), pages 957-974, September.
    6. Giorgio Giorgi & Cesare Zuccotti, 2016. "Equilibrium and Optimality in Gale-von Neumann Models," DEM Working Papers Series 119, University of Pavia, Department of Economics and Management.
    7. Roy Radner, 1961. "Prices and the Turnpike: III. Paths of Economic Growth that are Optimal with Regard only to Final States: A Turnpike Theorem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 98-104.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gale economy with investments; von Neumann equilibrium; limit production space; technological and economic efficiency of production; multilane production turnpike; turnpike effect;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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