Monotonicity and Continuity of the Critical Capital Stock in the Dechert-Nishimura Model

We show that the critical capital stock of the Dechert-Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.

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Year of publication:	2011-04
Authors:	Akao, Ken-Ichi ; Kamihigashi, Takashi ; Nishimura, Kazuo
Institutions:	Research Institute for Economics and Business Administration, Kobe University
Subject:	Dechert-Nishimura model \| Nonconvexity \| Optimal growth \| critical capital stock

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Extent:	application/pdf
Series:	Discussion Paper Series. - ISSN 1345-2207.
Type of publication:	Book / Working Paper
Notes:	Number DP2011-20 19 pages
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; D90 - Intertemporal Choice and Growth. General ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10009003257