IDEAS home Printed from https://ideas.repec.org/p/ecl/corcae/04-13.html
   My bibliography  Save this paper

On Choice of Technique in the Robinson-Solow-Srinivasan Model

Author

Listed:
  • Khan, M. Ali

    (Johns Hopkins U)

  • Mitra, Tapan

    (Cornell U)

Abstract

We report results on the optimal "choice of technique" in a model originally formulated by Robinson, Solow and Srinivasan. By viewing this model as a specific instance of the general theory of intertemporal resource allocation associated with Brock, Gale and McKenzie, we resolve long-standing conjectures in the form of theorems on the existence and price-support of optimal paths, and on their long-run behavior. We also examine policies, due to Stiglitz, as a cornerstone for a theory of transition dynamics in this model. We present examples to show that (i) an optimal program can be periodic, (ii) a Stiglitz' program can be bad, and (iii) a Stiglitz production program can be non-optimal. We then provide sufficient conditions under which the policies proposed by Stiglitz coincide with optimal behavior.

Suggested Citation

  • Khan, M. Ali & Mitra, Tapan, 2004. "On Choice of Technique in the Robinson-Solow-Srinivasan Model," Working Papers 04-13, Cornell University, Center for Analytic Economics.
  • Handle: RePEc:ecl:corcae:04-13
    as

    Download full text from publisher

    File URL: https://cae.economics.cornell.edu/04-13.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Cass, David & Stiglitz, Joseph E, 1969. "The Implications of Alternative Saving and Expectations Hypotheses for Choices of Technique and Patterns of Growth," Journal of Political Economy, University of Chicago Press, vol. 77(4), pages 586-627, Part II, .
    2. Bliss, C. J., 1975. "Capital Theory and the Distribution of Income," Elsevier Monographs, Elsevier, edition 1, number 9780720436044 edited by Bliss, C. J..
    3. Neri, Marcelo Cortes, 2002. "Brazilian macroeconomics with a human face: metropolitan crisis, poverty and social targets," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 464, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    4. Leonardo Rocha Souza, 2005. "A Note On Chambers'S "Long Memory And Aggregation In Macroeconomic Time Series"," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 46(3), pages 1059-1062, August.
    5. K. N. Raj & A. K. Sen, 1961. "Alternative Patterns Of Growth Under Conditions Of Stagnant Export Earnings," Oxford Economic Papers, Oxford University Press, vol. 13(1), pages 43-52.
    6. Hansen, Terje & Koopmans, Tjalling C., 1972. "On the definition and computation of a capital stock invariant under optimization," Journal of Economic Theory, Elsevier, vol. 5(3), pages 487-523, December.
    7. Souza, Leonardo da Rocha de, 2003. "The aliasing effect, the Fejer Kernel and temporally aggregated long memory processes," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 470, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    8. Neri, Marcelo Cortes & Soares, Wagner Lopes, 2002. "Pobreza, ativos e saúde no Brasil," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 465, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    9. Leonardo Rocha Souza, 2007. "Temporal Aggregation and Bandwidth selection in estimating long memory," Journal of Time Series Analysis, Wiley Blackwell, pages 701-722.
    10. P. K. Bardhan, 1969. "Optimal Growth and Allocation of Foreign Exchange," Working papers 36, Massachusetts Institute of Technology (MIT), Department of Economics.
    11. Costa, Carlos Eugênio da, 2003. "Risk sharing and the household collective model," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 497, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    12. Dutta, Prajit K. & Mitra, Tapan, 1989. "Maximum theorems for convex structures with an application to the theory of optimal intertemporal allocation," Journal of Mathematical Economics, Elsevier, vol. 18(1), pages 77-86, February.
    13. Mitra, Tapan & Wan, Henry Jr., 1986. "On the faustmann solution to the forest management problem," Journal of Economic Theory, Elsevier, vol. 40(2), pages 229-249, December.
    14. Costa, Carlos Eugênio da, 2003. "Normality under uncertainty," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 496, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    15. Bardhan, Pranab K, 1971. "Optimum Growth and Allocation of Foreign Exchange," Econometrica, Econometric Society, vol. 39(6), pages 955-971, November.
    16. Costa, Carlos Eugênio da, 2003. "Optimal taxation with gradual learning of types," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 499, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    17. Ferreira, Pedro Cavalcanti & Pessôa, Samuel de Abreu, 2003. "The costs of education, longevity and the poverty of nations," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 472, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    18. Neri, Marcelo Cortes & Soares, Wagner Lopes, 2003. "Idade, incapacidade e a inflação do número de pessoas com deficiência," FGV/EPGE Economics Working Papers (Ensaios Economicos da EPGE) 490, FGV/EPGE - Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
    19. W. A. Brock, 1970. "On Existence of Weakly Maximal Programmes in a Multi-Sector Economy," Review of Economic Studies, Oxford University Press, vol. 37(2), pages 275-280.
    20. McKenzie, Lionel W., 2005. "Optimal economic growth, turnpike theorems and comparative dynamics," Handbook of Mathematical Economics,in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 2, volume 3, chapter 26, pages 1281-1355 Elsevier.
    21. Stiglitz, Joseph E, 1970. "Reply to Mrs. Robinson on the Choice of Technique," Economic Journal, Royal Economic Society, vol. 80(318), pages 420-422, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. M. Khan & Alexander Zaslavski, 2007. "On a Uniform Turnpike of the Third Kind in the Robinson-Solow-Srinivasan Model," Journal of Economics, Springer, vol. 92(2), pages 137-166, October.
    2. Ali Khan, M. & Piazza, Adriana, 2012. "On the Mitra–Wan forestry model: A unified analysis," Journal of Economic Theory, Elsevier, vol. 147(1), pages 230-260.
    3. Monteiro, Paulo Klinger, 2006. "The set of equilibria of first-price auctions," Journal of Mathematical Economics, Elsevier, vol. 42(3), pages 364-372, June.
    4. Tavani, Daniele, 2008. "Optimal Induced Innovation and Growth with Congestion of a Limited Natural Resource," MPRA Paper 11525, University Library of Munich, Germany.
    5. Khan, M. Ali & Mitra, Tapan, 2005. "On topological chaos in the Robinson-Solow-Srinivasan model," Economics Letters, Elsevier, vol. 88(1), pages 127-133, July.
    6. Cavalcanti Ferreira, Pedro & Facchini, Giovanni, 2005. "Trade liberalization and industrial concentration: Evidence from Brazil," The Quarterly Review of Economics and Finance, Elsevier, pages 432-446.
    7. Kenji Sato & Makoto Yano, 2013. "Optimal ergodic chaos under slow capital depreciation," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 57-67, March.
    8. M. Khan & Alexander Zaslavski, 2010. "On locally optimal programs in the Robinson–Solow–Srinivasan model," Journal of Economics, Springer, vol. 99(1), pages 65-92, February.
    9. Khan, M. Ali, 2016. "On a forest as a commodity and on commodification in the discipline of forestry," Forest Policy and Economics, Elsevier, vol. 72(C), pages 7-17.
    10. Khalifa, Sherif, 2011. "Undiscounted optimal growth with consumable capital and labor-intensive consumption goods," Economic Modelling, Elsevier, vol. 28(4), pages 1673-1682, July.
    11. M. Ali Khan & Adriana Piazza, 2010. "On uniform convergence of undiscounted optimal programs in the Mitra-Wan forestry model: The strictly concave case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 57-76.
    12. Khan, M. Ali & Zaslavski, Alexander J., 2009. "On existence of optimal programs: The RSS model without concavity assumptions on felicities," Journal of Mathematical Economics, Elsevier, vol. 45(9-10), pages 624-633, September.

    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O21 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Planning Models; Planning Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:corcae:04-13. 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: (). General contact details of provider: http://edirc.repec.org/data/cacorus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.