Larrosa, Juan MC (2007): Optimal growth with intermediate goods interdependence: A difference game approach.
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Two countries face a strategic interdependence in producing intermediate goods. Producing these intermediate goods requires both of domestic capital and another imported intermediate good. Individually they determine its balanced growth path by taking into account this interdependence. By allowing for strategic interactions in the analysis we adapted a two-agent dynamic setting and find an interior Markov Perfect Equilibrium (MPE) as well as an open-loop equilibrium. We find that main results resemble each other but growth rates will be higher when strategies are allowed to be revised dynamically.
|Item Type:||MPRA Paper|
|Institution:||CONICET - Departamento de Economía, Universidad Nacional del Sur|
|Original Title:||Optimal growth with intermediate goods interdependence: A difference game approach|
|Keywords:||Difference games; Economic growth; Intermediate goods|
|Subjects:||C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
F - International Economics > F1 - Trade > F15 - Economic Integration
|Depositing User:||Juan M.C. Larrosa|
|Date Deposited:||01. Sep 2007|
|Last Modified:||18. Feb 2013 18:13|
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