Adaptive Rolling Plans Are Good

Maćkowiak, Piotr (2009): Adaptive Rolling Plans Are Good. Published in: Argumenta Oeconomica , Vol. 25, No. 2/2010 (2010): pp. 117-136.

Abstract

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: indirect utility function; good plans; adaptive rolling-planning; multisector model
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis

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