Non-Existence of Optimal Programs in Continuous Time
20 Pages Posted: 1 Sep 2016
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: 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
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