Non-Existence of Optimal Programs in Continuous Time

20 Pages Posted: 1 Sep 2016

See all articles by Giorgio Fabbri

Giorgio Fabbri

Parthenope University - Dipartimento di Studi Economici

Silvia Faggian

Ca Foscari University of Venice - Dipartimento di Economia

Giuseppe Freni

University Parthenope of Napoli

Date Written: August 27, 2016

Abstract

We report an example of a two-dimensional undiscounted convex optimal growth model in continuous time in which, although there is a unique “golden rule”, no overtaking optimal solutions exists in a full neighbourhood of the steady state. The example confirms a conjecture advanced in 1976 that the minimum dimension for non-existence of overtaking optimal programs in continuous time is 2.

Keywords: Optimal growth, Overtaking, Continuous time models

JEL Classification: C61, D90

Suggested Citation

Fabbri, Giorgio and Faggian, Silvia and Freni, Giuseppe, Non-Existence of Optimal Programs in Continuous Time (August 27, 2016). Available at SSRN: https://ssrn.com/abstract=2832750 or http://dx.doi.org/10.2139/ssrn.2832750

Giorgio Fabbri

Parthenope University - Dipartimento di Studi Economici ( email )

Via Medina 40
Via Generale Parisi, 13
Naples, 80133
Italy

Silvia Faggian (Contact Author)

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Giuseppe Freni

University Parthenope of Napoli ( email )

Via Acton 38
Naples, 80133
Italy

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