Modeling the minimum time needed to economic maturity
A general equilibrium model has been constructed in a stochastic endogenous growth economy driven by an Ito-Levy diffusion process. The minimum time to “economic maturity” for an underdeveloped economy has been computed both in the preference manifold of the modified Ramsey fashion and in that of the modified Radner fashion with its support, i.e., fiscal policies and savings strategy, endogenously determined. Furthermore, the effects of different information structures to the endogenous time have been thoroughly investigated, and local sensitivity analyses of optimal consumption per capita with respect to the initial level of capital stock per capita have been smoothly incorporated into the current macroeconomic model.
|Date of creation:||01 Oct 2011|
|Date of revision:||31 Jul 2012|
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- Kenneth L. Judd, 1997. "The Optimal Tax Rate for Capital Income is Negative," NBER Working Papers 6004, National Bureau of Economic Research, Inc.
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