Solution to an open question about optimal economic growth models

Solution to an open question about optimal economic growth models

We prove that if the total factor productivity A of an aggregative economy is right at the barrier $ \sigma +\lambda $ σ + λ , with σ being the growth rate of labor force and λ the real interest rate, then the unique policy to optimally control the economy is the same as the one for optimally contro...

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Bibliographic Details
Published in:Applicable analysis Vol. 103; no. 7; pp. 1215 - 1223
Main Authors: Huong, Vu Thi, Kaya, C. Yalçın, Yen, Nguyen Dong
Format: Journal Article
Language:English
Published: Abingdon Taylor & Francis 02-05-2024
Taylor & Francis Ltd
Subjects:
bang-bang control
Economic development
Economic growth model
Economic models
maximum principle
optimal control
Optimization
Productivity
Questions
singular control
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Summary:We prove that if the total factor productivity A of an aggregative economy is right at the barrier $ \sigma +\lambda $ σ + λ , with σ being the growth rate of labor force and λ the real interest rate, then the unique policy to optimally control the economy is the same as the one for optimally controlling weak economies, where $ A \lt \sigma +\lambda $ A < σ + λ . This result gives a complete answer for the interesting open question raised by Vu Thi Huong in her recent paper [Optimal economic growth problems with high values of total factor productivity. Appl Anal. 2022;101:1315-1329].
ISSN:0003-6811
1563-504X
DOI:10.1080/00036811.2023.2236645