Adaptive Rolling Plans Are Good
Here we prove the goodness property of adaptive rolling plans in a multisector optimal growth model under decreasing returns in deterministic environment. Goodness is achieved as a result of fast convergence (at an asymptotically geometric rate) of the rolling plan to balanced growth path. Further on, while searching for goodness, we give a new proof of strong concavity of an indirect utility function – this result is achieved just with help of some elementary matrix algebra and differential calculus.
|Date of creation:||2009|
|Publication status:||Published in Argumenta Oeconomica 2/2010.25(2010): pp. 117-136|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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- Venditti, A., 1995.
"Strong Concavity Properties of Direct Utility Functions in Multisector Optimal Growth Models,"
95a31, Universite Aix-Marseille III.
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Springer, vol. 53(1), pages 1-29, February.
- Bala, V. & Majumdar, M. & Mitra, T., 1990. "Decentralized Evolutionary Mechanisms For Intertemporal Economies - A Possibility Result," Papers 422, Cornell - Department of Economics.
- Michael Kaganovich, 1998. "Decentralized Evolutionary Mechanism of Growth in a Linear Multi-sector Model," Metroeconomica, Wiley Blackwell, vol. 49(3), pages 349-363, October.
- Benhabib, Jess & Nishimura, Kazuo, 1979. "On the Uniqueness of Steady States in an Economy with Heterogeneous Capital Goods," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 20(1), pages 59-82, February.
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