The economics of orchards: An exercise in point-input, flow-output capital theory. (English) Zbl 0733.90023
Summary: This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit nonconvergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are “small” when the discount factor is “close” to unity.
MSC:
| 91B62 | Economic growth models |
| 91B66 | Multisectoral models in economics |
| 91B28 | Finance etc. (MSC2000) |
Keywords:
optimal intertemporal programs; point-input flow-output capital theory; neighborhood turnpike theoremReferences:
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