Optimal policy and consumption smoothing effects in the time-to-build AK model

Bambi, M.; Fabbri, G.; Gozzi, F.

doi:10.1007/s00199-010-0577-3

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In this paper, 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.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11385/5419

Titolo:	Optimal policy and consumption smoothing effects in the time-to-build AK model
Autori interni:	GOZZI, FAUSTO
Data di pubblicazione:	2012
Rivista:	ECONOMIC THEORY
Abstract:	In this paper, 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.
Handle:	http://hdl.handle.net/11385/5419
Appare nelle tipologie:	01.1 - Articolo su rivista (Article)

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