Quarterly Journal of Economics Vol. 100 No. 4 1985
Comparative Dynamics in Aggregate Models of Optimal Capital Accumulation
Abstract
The hypothesis that capital increases at each time in response to an increase in the discount factor is explored for a class of aggregate models of optimal accumulation. When the optimal program is monotonic, capital is shown to increase with an increase in the discount factor. A counterexample in the case of oscillating programs is discussed. An application of the monotone case is given for an adjustment cost model of the firm.
- DOI
- 10.2307/1885682
- Volume
- 100
- Issue
- 4
- Pages
- 1235
- Sources
- openalex crossref