A simple characterization for sustained growth

Ha-Huy, Thai and Tran, Nhat-Thien (2019): A simple characterization for sustained growth.

Abstract

This article considers an inter-temporal optimization problem in a fairly general form and give sufficient conditions ensuring the convergence to infinity of the economy. These conditions are easy to verify and can be applied for a large class of problems in literature. As examples, some applications for different economies are also given.

• Item Type: MPRA Paper
• Language: English
• Keywords: Unbounded growth, sustained growth, non-convex dynamic programming
• Subjects: C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O41 - One, Two, and Multisector Growth Models

References

Akao, K., I., T. Kamihigashi \& K. Nishimura (2011): Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model. \emph{Journal of Mathematical Economics} \textbf{47}: 677-682.

Amir, R. (1996): Sensitivity analysis of multisector optimal of economic dynamics. \emph{Journal of Mathematical Economics \textbf{25}: 123-141.}

Bellman, R., E. (1957): Dynamic Programming. \emph{Princeton University Press.}

Cao, D. \& I. Werming (2018): Saving and dissaving with hyperbolic discounting. \emph{Econometrica} \textbf{86}: 805-857.

Clark, C., W. (1971): Economically Optimal Policies for the Utilization of Biologically Renewable Resources. \emph{Mathematical Biosciences \textbf{12}: 245-260}.

Crettez, B., N. Hayek, L. Morhaim (2017): Optimal growth with investment enhancing labor. \emph{Mathematical Social Sciences} \textbf{86}: 23-36.

Dana, R., A. \& C. Le Van (2002): Dynamic Programming in Economics. \emph{Kluwer Academic Publishers}.

Dechert, W., D. \& K. Nishimura (1983): A complete characterization of optimal growth paths in an aggregated model with a non-concave production function. \emph{Journal of Economic Theory \textbf{31}: 332-354.}

Jones, L., E. \& R. E. Manuelli (1997): The source of growth. \textit{Journal of Economic Dynamics and Control} \textbf{21}: 75-114.

Kamihigashi, T. (2002): A Simple Proof of the Necessity of the Transversality Condition. \emph{Economic Theory} \textbf{20}: 427-433.

Kamihigashi, T. (2008): The spirit of capitalism, stock market bubbles and output fluctuations. \emph{International Journal of Economic Theory}.

Kamihigashi, T. \& S. Roy (2006): Dynamic optimization with a nonsmooth, nonconvex technology: the case of a linear objective function. \emph{Economic Theory \textbf{29}: 325-340}.

Kamihigashi, T. \& S. Roy (2007): A nonsmooth, nonconvex model of optimal growth. \emph{Journal of Econonomic Theory \textbf{132}: 435-460.}

Le Van, C. \& L. Morhaim (2002): Optimal Growth Models with Bounded or Unbounded Returns: A Unifying Approach. \emph{Journal of Economic Theory} \textbf{105}: 157-187.

Lucas, R., E., Jr (1988): On the mechanics of economic development. \emph {Journal of Monetary Economics} \textbf{22}: 3-42.

Majumdar, M. \& T. Mitra (1983): Dynamic Optimization with a Non-Convex Technology: The Case of a Linear Objective Function. \emph{Review of Economic Studies} \textbf{50}: 143-151.

Majumdar, M. \& M. Nermuth (1982): Dynamic optimization in non-convex models with irreversible investment: monotonicity and turnpike result. \emph{Journal of Economic Theory} \textbf{42}: 339-362.

Nishimura, K, R. Rudnicki \& J. Stachurski (2006): Stochastic optimal growth with nonconvexities. \textit{Journal of Mathematical Economics} \textbf{42}: 74-96.

Skiba, A., K (1978): Optimal growth with a convex-concave production function. \textit{Econometrica} \textbf{46}: 527-539.

Stokey, N. \& R. Lucas (with Prescott) (1989): Recursive methods in economic dynamics. \emph{Harvard University Press}.

Roy, S. (2010): On sustained economic growth with wealth effects. \emph{International Journal of Economic Theory}.