Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Non-Convex Aggregate Technology and Optimal Economic Growth

N. M. Hung, C. Le Van and P. Michel
Economic Theory
Vol. 40, No. 3 (Sep., 2009), pp. 457-471
Published by: Springer
Stable URL: http://www.jstor.org/stable/40283040
Page Count: 15
  • Download ($43.95)
  • Cite this Item
Non-Convex Aggregate Technology and Optimal Economic Growth
Preview not available

Abstract

This paper examines a model of optimal growth where the aggregation of two separate well behaved and concave production technologies exhibits a basic non-convexity. First, we consider the case of strictly concave utility function: when the discount rate is either low enough or high enough, there will be one steady state toward which the convergence of the optimal path is monotone and asymptotic. When the discount rate is in some intermediate range, we will find sufficient conditions for having either one equilibrium or multiple equilibria steady state. Depending to whether the initial capital per capita is located with respect to a critical value, we show that the optimal paths monotonically converge to one single appropriate equilibrium steady state. Second, we consider the case of linear utility and provide sufficient conditions to have either unique or two steady states when the discount rate is in some intermediate range. In this range, we give conditions under which the above critical value might not exist, and the economy attains one steady state in finite time, then stays at the other steady state afterward.

Page Thumbnails

  • Thumbnail: Page 
[457]
    [457]
  • Thumbnail: Page 
458
    458
  • Thumbnail: Page 
459
    459
  • Thumbnail: Page 
460
    460
  • Thumbnail: Page 
461
    461
  • Thumbnail: Page 
462
    462
  • Thumbnail: Page 
463
    463
  • Thumbnail: Page 
464
    464
  • Thumbnail: Page 
465
    465
  • Thumbnail: Page 
466
    466
  • Thumbnail: Page 
467
    467
  • Thumbnail: Page 
468
    468
  • Thumbnail: Page 
469
    469
  • Thumbnail: Page 
470
    470
  • Thumbnail: Page 
471
    471