Optimal policy and consumption smoothing effects in the time-to-build AK model. (English) Zbl 1246.91082
Summary: The dynamic programming approach is exploited in order to identify the closed loop policy function, and the consumption smoothing mechanism in an endogenous growth model with time to build, linear technology and irreversibility constraint in investment. Moreover, the link among the time to build parameter, the real interest rate, and the magnitude of the smoothing effect is deeply investigated and compared with what happens in a vintage capital model characterized by the same technology and utility function. Finally, we have analyzed the effect of time to build on the speed of convergence of the main aggregate variables.
References:
| [1] | Asea P., Zak P.: Time-to-build and cycles. J Econ Dyn Control 23(8), 1155–1175 (1999) · Zbl 1016.91068 · doi:10.1016/S0165-1889(98)00052-9 |
| [2] | Bambi M.: Endogenous growth and time-to-build: the AK case. J Econ Dyn Control 32(4), 1015–1040 (2008) · Zbl 1181.91166 · doi:10.1016/j.jedc.2007.04.002 |
| [3] | Bambi, M., Gori, F.: Unifying time to build theor (preprint) (2010) |
| [4] | Barro R., Sala-i Martin X.: Economic Growth. Massachusetts Institute of Technology, London (2004) · Zbl 0825.90067 |
| [5] | Bellman R., Cooke K.: Difference-Differential Equations. Academic, New York (1963) · Zbl 0105.06402 |
| [6] | Benhabib J., Rustichini A.: Vintage capital, investment, and growth. J Econ Theory 55(2), 323–339 (1991) · Zbl 0754.90007 · doi:10.1016/0022-0531(91)90043-4 |
| [7] | Bensoussan A., Da Prato G., Delfour M., Mitter S.: Representation and Control of Infinite Dimensional Systems, vols. 1, 2. Birkhäuser, Boston (1992) |
| [8] | Boucekkine R., Licandro O., Puch L., Del Rio F.: Vintage capital and the dynamics of the AK model. J Econ Theory 120(1), 39–72 (2005) · Zbl 1120.91024 · doi:10.1016/j.jet.2004.02.006 |
| [9] | Collard, F., Licandro, O., Puch, L.: The Short-run Dynamics of Optimal Growth Models with Delays, pp. 127–143. Annales d’Économie et de Statistique (2008) |
| [10] | d’Albis H., Augeraud-Véron E.: Balanced cycles in an OLG model with a continuum of finitely-lived individuals. Econ Theory 30(1) 181–186 (2007) · Zbl 1124.91049 · doi:10.1007/s00199-005-0043-9 |
| [11] | Diekmann O., Van Gils S., Verduyn Lunel S., Walther H.: Delay Equations. Springer, Berlin (1995) |
| [12] | El-Hodiri M., Loehman E., Whinston A.: An optimal growth model with time lags. Econometrica 40(6), 1137–1146 (1972) · Zbl 0262.90011 · doi:10.2307/1913860 |
| [13] | Fabbri G., Gozzi F.: Solving optimal growth models with vintage capital: the dynamic programming approach. J Econ Theory 143(1), 331–373 (2008) · Zbl 1151.91069 · doi:10.1016/j.jet.2008.03.008 |
| [14] | Kalecki M.: A macroeconomic theory of the business cycle. Econometrica 3, 327–344 (1935) · JFM 61.1326.06 · doi:10.2307/1905325 |
| [15] | Kitagawa A., Shibata A.: Endogenous growth cycles in an overlapping generations model with investment gestation lags. Econ Theory 25(3), 751–762 (2005) · Zbl 1127.91044 |
| [16] | Kolmanovskii V., Myshkis A.: Applied Theory of Functional Differential Equations. Academic Publishers, Dordrecht (1992) · Zbl 0917.34001 |
| [17] | Ortigueira S., Santos M.: On the speed of convergence in endogenous growth model. Am Econ Rev 87(3), 383–399 (1997) |
| [18] | Rustichini A.: Hopf bifurcation for functional differential equation of mixed type. J Dyn Differ Equ 1(2), 145–177 (1989) · Zbl 0684.34070 · doi:10.1007/BF01047829 |
| [19] | Vinter R., Kwong R.: The infinite time quadratic control problem for linear systems with state and control delays: an evolution equation approach. SIAM J Control Optim 19, 139–153 (1981) · Zbl 0465.93043 · doi:10.1137/0319011 |
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.
