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Intertemporal Complementarity and Optimality: A Study of a Two-Dimensional Dynamical System

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  • Kazuo Nishimura
  • Tapan Mitra

Abstract

We study the underlying structure of the two-dimensional dynamical system generated by a class of dynamic optimization models, which allow for intertemporal complementarily between adjacent periods, but which preserve the time additively separable framework of Ramsey models. Specifically, we identify conditions under which the results of the traditional Ramsey type theory are preserved even when the intertemporal independence assumption is relaxed. Local analysis of this theme has been presented by Samuelson (1971). We establish global convergence results and relate them to the local analysis, by using the mathematical theory of two-dimensional dynamical syste

Suggested Citation

  • Kazuo Nishimura & Tapan Mitra, 2004. "Intertemporal Complementarity and Optimality: A Study of a Two-Dimensional Dynamical System," Econometric Society 2004 Far Eastern Meetings 543, Econometric Society.
  • Handle: RePEc:ecm:feam04:543
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    Cited by:

    1. Goenka, Aditya & Nguyen, Manh-Hung, 2009. "Existence of Competitive Equilibrium in an Optimal Growth Model with Elastic Labor Supply and Smoothness of the Policy Function," TSE Working Papers 09-064, Toulouse School of Economics (TSE).
    2. Hippolyte d'Albis & Jean-Pierre Drugeon, 2020. "On Investment and Cycles in Explicitely Solved Vintage Capital Models," PSE Working Papers halshs-02570648, HAL.
    3. Olivier Bruno & Cuong Van & Benoît Masquin, 2009. "When does a developing country use new technologies?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(2), pages 275-300, August.
    4. Jean-Pierre Drugeon & Thai Ha-Huy & Thi-Do-Hanh Nguyen, 2018. "On Maximin Optimization Problems & the Rate of Discount: a Simple Dynamic Programming Argument," Working Papers halshs-01761997, HAL.
    5. Hiraguchi, Ryoji, 2011. "A two sector endogenous growth model with habit formation," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 430-441, April.
    6. Deng, Liuchun & Khan, M. Ali & Mitra, Tapan, 2022. "Continuous unimodal maps in economic dynamics: On easily verifiable conditions for topological chaos," Journal of Economic Theory, Elsevier, vol. 201(C).

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    More about this item

    Keywords

    intertemporal complementarity; supermodularity; monotonicity; turnpike property;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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