A Model of Optimal Growth Strategy.

In this paper we present an optimal growth model with convex-concave technology, for an open developing country. The latter may choose to produce consumption goods by borrowing on capital markets. We prove there exists two non trivial steady states. An optimal path converges either to 0 or to the high stedy-state. That depends on the levels of the initial debt and/or of the debt constraint. We prove also there exists a poverty trap if the time preference is very high.

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Year of publication:	1997
Authors:	Askenazy, P. ; Le Van, C.
Institutions:	Département et Laboratoire d'Économie Théorique Appliquée (DELTA), École Normale Supérieure (ENS Paris)
Subject:	ECONOMIC DEVELOPMENT \| ECONOMETRICS

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Series:	DELTA Working Papers.
Type of publication:	Book / Working Paper
Notes:	37 pages
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; D92 - Intertemporal Firm Choice and Growth, Investment, or Financing ; O12 - Microeconomic Analyses of Economic Development ; C41 - Duration Analysis
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005256776