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Non-convex aggregative technology and optimal economic growth

  • Manh Nguyen Hung

    ()

    (Université Laval)

  • Cuong Le Van

    ()

    (CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - CNRS - Centre National de la Recherche Scientifique - UP1 - Université Panthéon-Sorbonne)

  • Philippe Michel

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales - Université Paul Cézanne - Aix-Marseille 3 - Université de la Méditerranée - Aix-Marseille 2 - CNRS - Centre National de la Recherche Scientifique, EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

This paper examines a model of optimal growth where the agregation of two separate well behaved and concave production technologies exhibits a basic non-convexity. Multiple equilibria prevail in an intermediate range of interest rate. However, we show that the optimal paths monotonically converge to the one single appropriate equilibrium steady state.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00197556.

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Date of creation: Dec 2005
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Publication status: Published in Cahiers de la Maison des Sciences Economiques 2005.95 - ISSN : 1624-0340. 2005
Handle: RePEc:hal:cesptp:halshs-00197556
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00197556
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  1. Amir, R., 1991. "Sensitivity analysis of multi-sector optimal economic dynamics," CORE Discussion Papers 1991006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Cuong Le Van & Rose-Anne Dana, 2003. "Dynamic Programming in Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119098, HAL.
  3. Takashi Kamihigashi & Santanu Roy, 2004. "Dynamic Optimization with a Nonsmooth, Nonconvex Technology: The Case of a Linear Objective Function," Discussion Paper Series 161, Research Institute for Economics & Business Administration, Kobe University.
  4. repec:hal:journl:halshs-00119098 is not listed on IDEAS
  5. Askenazy, P. & Le Van, C., 1997. "A Model of Optimal Growth Strategy," DELTA Working Papers 97-27, DELTA (Ecole normale supérieure).
  6. Takashi Kamihigashi & Santanu Roy, 2003. "A Nonsmooth, Nonconvex Model of Optimal Growth," Discussion Paper Series 158, Research Institute for Economics & Business Administration, Kobe University.
  7. repec:dau:papers:123456789/13605 is not listed on IDEAS
  8. repec:dau:papers:123456789/416 is not listed on IDEAS
  9. Majumdar, Mukul & Mitra, Tapan, 1982. "Intertemporal allocation with a non-convex technology: The aggregative framework," Journal of Economic Theory, Elsevier, vol. 27(1), pages 101-136, June.
  10. Mukul Majumdar & Tapan Mitra, 1983. "Dynamic Optimization with a Non-Convex Technology: The Case of a Linear Objective Function," Review of Economic Studies, Oxford University Press, vol. 50(1), pages 143-151.
  11. Skiba, A K, 1978. "Optimal Growth with a Convex-Concave Production Function," Econometrica, Econometric Society, vol. 46(3), pages 527-39, May.
  12. 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.
  13. Mukul Majumdar & Manfred Nermuth, 1982. "Dynamic Optimization in Non-Convex Models with Irreversible Investment: Monotonicity and Turnpike Results (Now published in Zeitschrift für National-Ökonomie (Journal of National Economics), vol.42, N," STICERD - Theoretical Economics Paper Series 40, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
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