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Nonclassical Brock-Mirman Economies

We show that monotone methods, especially, those based on lattice theory and lattice programming can produce results, e.g., on the monotonicity of the optimal programs, as well as on the existence of fixed points, consistent with the current macroeconomics literature, in the absence of continuity, differentiability and concavity. We illustrate the use and power of the lattice theory techniques in two simple and very useful models. First, the Brock-Mirman growth model is studied in a nonclassical setting. Here all the assumptions of the original model are made except that the production function is allowed to be non-concave. The second model is an extension of the Brock-Mirman model that goes beyond the planner's solution and allows for decentralized decisions in equilibrium. JEL Classification: C61, C62, D90, E60

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Paper provided by Department of Economics, W. P. Carey School of Business, Arizona State University in its series Working Papers with number 2179544.

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Handle: RePEc:asu:wpaper:2179544
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  1. Hopenhayn, Hugo A & Prescott, Edward C, 1992. "Stochastic Monotonicity and Stationary Distributions for Dynamic Economies," Econometrica, Econometric Society, vol. 60(6), pages 1387-406, November.
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  14. Manjira Datta & Leonard Mirman & Olivier Morand & Kevin Reffett, . "Lattice Methods in Computation of Sequential Markov Equilibrium in Dynamic Games," Working Papers 2179545, Department of Economics, W. P. Carey School of Business, Arizona State University.
  15. Olivier F. Morand & Kevin L. Reffett, 2002. "Existence and Uniqueness of Equilibrium in Nonoptimal Unbounded Infinite Horizon Economies," Tinbergen Institute Discussion Papers 02-085/2, Tinbergen Institute.
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  18. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-80, January.
  19. Manjira Datta & Leonard J. Mirman & Olivier F. Morand & Kevin L. Reffett, 2005. "Markovian Equilibrium in Infinite Horizon Economies with Incomplete Markets and Public Policy," Tinbergen Institute Discussion Papers 05-013/2, Tinbergen Institute.
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  24. Amir, Rabah & Mirman, Leonard J & Perkins, William R, 1991. "One-Sector Nonclassical Optimal Growth: Optimality Conditions and Comparative Dynamics," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 625-44, August.
  25. Manuel S. Santos & Jesus Vigo-Aguiar, 1998. "Analysis of a Numerical Dynamic Programming Algorithm Applied to Economic Models," Econometrica, Econometric Society, vol. 66(2), pages 409-426, March.
  26. Manjira Datta & Leonard Mirman & Kevin Reffett, . "Existence and Uniqueness of Equilibrium in Distorted Dynamic Economies with Capital and Labor," Working Papers 2132846, Department of Economics, W. P. Carey School of Business, Arizona State University.
  27. 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.
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