Some theoretical properties of a two-sector model of optimal growth.

Some theoretical properties of a two-sector model of optimal growth by Leif Johansen Download PDF EPUB FB2

Stochastic optimal growth involves the study of optimal intertemporal alloca-tion of capital and consumption in an economy where production is subject to random disturbances. The theory traces its roots to the seminal work on de-terministic optimal growth by.

Some Theoretical Properties of a Two-Sector Model of Optimal Growth' 1. INTRODUCTION The theoretical model which forms the basis for the following analysis was first outlined in a paper [7] which was presented at the Symposium on Econometric Analysis for National Economic Planning, organized by the Colston Research Society, Bristol, The determination of intertemporal saving and investment decisions in the model is essentially a multi-sector open-economy extension of neoclassical optimal growth theory in the Ramsey–Cass.

R.F. Harrod () Towards a Dynamic Economics: Some recent developments of economic theory and their Accumulation for an Economy in which there is Exogenous Technical Change", in Shell,editor, Essays on the Theory of Optimal Economic Growth () "Optimal Savings in a Two Sector Model of Growth.

This book covers a variety of topics in economic theory, ranging from the analysis of production functions to the general recoverability problem of optimal dynamic behavior. Organized into nine chapters, this book begins with an overview of the theory of observable behavior by analyzing the invariant relationships among economic variables.

In probability theory and intertemporal portfolio choice, the Kelly criterion (or Kelly strategy, Kelly bet, ), also known as the scientific gambling method, is a formula for bet sizing that leads almost surely to higher wealth compared to any other strategy in the long run (i.e.

approaching the limit as the number of bets goes to infinity). The Kelly bet size is found by maximizing the. The final chapters explore the production-possibility set with public intermediate goods and the scale effect of public goods on production-possibility sets. These chapters also look into the properties of the per capita production set in the two-sector model of economic growth.

This book will prove useful to economists, teachers, and students. The Optimal Growth Problem 1 A “Robinson Crusoe” Model We are going to start with what is in many ways a rather simple model. It is going to look nothing like a model of a modern economy, for instance. Nevertheless, we are going to work through this model completely, going over all the details of how to solve it.

Some of this may already be. The basic contribution of this paper is an extension of the two-sector neo-classical growth model in which a non-market mechanism, for production of public goods, coexists with a market for private capital goods.

For such a mixed economy we have shown that a growth equilibrium consistent with the neo-classical stylized facts exists. Secondly, it has been demonstrated that there is a trade-off.

emphasis is on theory, although data guides the theoretical explorations. We build en- The model The model consists of some simple equations: Ct +It = Yt = F (Kt;L) () The \Ak" model of growth emphasizes physical capital accumulation as the driving force of prosperity.

It is not the only way to think about growth, however. Optimal growth and the golden rule in a two-sector model of capital accumulation Mehdi Senouci February 6, Abstract We contribute to the literature on optimal growth in two-sector models by solving a Ram-sey problem with a concave utility function.

The unique possible steady-state is. Optimal Growth Model We will assume for now that $ \phi $ is the distribution of $ \xi:= \exp(\mu + s \zeta) $ where $ \zeta $ is standard normal, $ \mu $ is a shock location parameter and $ s $ is a shock scale parameter.

We will store this and other primitives of the optimal growth model in a class. The five stages of Freud’s psychosexual theory of development include the oral, anal, phallic, latency, and genital stages.

According to his theory, each stage of psychosexual development must be met successfully for proper development; if we lack proper nurturing and parenting during a stage, we may become stuck in, or fixated on, that stage.

tal accumulation to study optimal growth. At the same time, the growth models of Roy Harrod, Evsey Domar, and John von Neumann continued to attract some (declining) attention, while alternative approaches to growth theory (especially those of Nicholas Kaldor and other Cambridge economists) were still very much on the agenda.

Hahn and R. In this lecture we’re going to study a simple optimal growth model with one agent. The model is a version of the standard one sector infinite horizon growth model studied in, chapter 2, section ; EDTC, chapter 1, chapter 12 ; The technique we use to solve the model is dynamic programming.

Topics covered include asymptotic properties of infection times, limiting shape results, fluctuation bounds, and geometrical properties of geodesics, which are optimal paths for growth. Readership Graduate Students and researchers interested in various models of random growth in percolation theory, cell growth, and particle systems.

A First Look at Optimal Growth in Continuous Time The q-Theory of Investment Taking Stock References and Literature Exercises Part 3. Neoclassical Growth Chapter 8. The Neoclassical Growth Model Preferences, Technology and Demographics Characterization of Equilibrium Multisector growth models are basic building blocks not only for optimal planning models (Majumdar ; McKenzie ) but also for recursive general equilibrium models (McKenzie ; Stokey and Lucas ), and for econometrically tractable models for business cycle research (Cooley ) and general macroeconomics (Sargent ).Majumdar has already covered some basic theory, some.

The Hamiltonian is a function used to solve a problem of optimal control for a dynamical can be understood as an instantaneous increment of the Lagrangian expression of the problem that is to be optimized over a certain time period.

Inspired by, but distinct from, the Hamiltonian of classical mechanics, the Hamiltonian of optimal control theory was developed by Lev Pontryagin as part. Capital Growth: Theory and Practice many attractive and some not attractive properties is the growth op-timal strategy, where the expected logarithm of wealth is maximized.

Vladimirow () have used the optimal growth strategy to compute opti-mal portfolio weights in multi-asset and worldwide asset allocation problems. J.S. Duesenberry in his book Business Cycles and Economic Growth presents an extension of the simple accelerator and integrates the profits theory and the acceleration theory of investment.

Duesenberry has based his theory on the following propositions: (1) Gross investment starts exceeding depreciation when capital stock grows.The Solow growth model is a workhorse for many macro applications, and it is the starting place for the modern theory of economic growth.

Here we begin with the basics of this model, which will already be familiar to many of you. 1. Introduction to Modern Economic Growth, Chapter 2. 2. Solow, Robert, (), Growth Theory: An Exposition.Additional Physical Format: Online version: Essays on the theory of optimal economic growth.

Cambridge, Mass., M.I.T. Press [] (OCoLC)