Vintage Capital in the AK growth model: a Dynamic Programming approach. Extended version
Fabbri, Giorgi and Gozzi, Fausto (2008) Vintage Capital in the AK growth model: a Dynamic Programming approach. Extended version. [Working Paper]. p. 50. MPRA Paper (No. 7334). (Submitted)
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Official URL: http://mpra.ub.uni-muenchen.de/7334/1/MPRA_paper_7...
This paper deals with an endogenous growth model with vintage capital and, more precisely, with the AK model proposed in . In endogenous growth models the introduction of vintage capital allows to explain some growth facts but strongly increases the mathematical difficulties. So far, in this approach, the model is studied by the Maximum Principle; here we develop the Dynamic Programming approach to the same problem by obtaining sharper results and we provide more insight about the economic implications of the model. We explicitly ﬁnd the value function, the closed loop formula that relates capital and investment, the optimal consumption paths and the long run equilibrium. The short run ﬂuctuations of capital and investment and the relations with the standard AK model are analyzed. Finally the applicability to other models is also discussed.
|Item Type:||Report / Paper (Working Paper)|
|Research documents and activity classification:||Working Papers > Non-Refereed Working Papers / of national relevance only|
|Divisions:||Department of Business and Management|
|Uncontrolled Keywords:||Endogenous growth; Vintage capital; AK model; Dynamic programming.|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-S/06 Mathematics for Economics, Actuarial Studies and Finance|
|Deposited By:||Maria Teresa Nistico|
|Deposited On:||02 Dec 2010 16:02|
|Last Modified:||19 Apr 2013 22:46|
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