Turnpike theory: a current perspective
This 2012 perspective of the 1987 Palgrave entry on â€˜turnpike theoryâ€™ highlights the subsequent development of the subject in the light of a critical re-reading of the original. It distinguishes the 1949 conception, a response of Samuelson to a 1945 von Neumann challenge to the reception of his growth model in the economic literature, from the more capacious 1976 outline furnished by McKenzie. Thus, it differentiates asymptotic convergence of infinite-horizon optimal programs from what it terms their finite-horizon, classical turnpike counterparts. It identifies a move from the investigation of general theorems to a more detailed working of simple examples, and reports results on specific models of â€˜choice of techniqueâ€™ in development planning, and of lumber extraction in the economics of forestry. Drawing on ongoing advances in the field of dynamical systems, it sees such models as both litmus tests of the general theory and as productive settings to study the rationalisability of policy functions and a â€˜folk theorem of intertemporal resource allocation'. The entry concludes with brief speculative remarks for future directions.
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|This chapter was published in: Steven N. Durlauf & Lawrence E. Blume (ed.) , , chapter 1, pages , 2012,2nd quarter update.|
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