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Modeling the minimum time needed to economic maturity

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  • Dai, Darong
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    Abstract

    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.

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    File URL: http://mpra.ub.uni-muenchen.de/40583/1/MPRA_paper_40583.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 40583.

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    Date of creation: 01 Oct 2011
    Date of revision: 08 Aug 2012
    Handle: RePEc:pra:mprapa:40583
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    Keywords: Endogenous growth; Economic maturity; Optimal taxation; Endogenous savings; Preference manifold; Information structure; Local sensitivity analyses; Economic development;

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    Find related papers by JEL classification:
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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    Cited by:

    1. Darong Dai, 2013. "Wealth Martingale and Neighborhood Turnpike Property In Dynamically Complete Market With Heterogeneous Investors," Economic Research Guardian, Weissberg Publishing, vol. 3(2), pages 86-110, December.

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