Theoretical and Applied Economics
No. 11 / 2013 (588)
A turnpike theorem involving a modified Golden Rule
Nanjing University, China
Kunrong SHEN
Nanjing University, China
Abstract. In the current study, we investigate efficient capital accumulation in a stochastic neoclassical aggregate growth model. The underlying uncertainty is driven by Brownian-motion shocks and the major results do not rely on the specification of production functions. The stochastic balanced path of the capitallabor ratio is naturally derived by a martingale, and the corresponding modified Golden Rule path of capital accumulation is well-defined. The powerful martingale theory is thus employed, and a stochastic turnpike theorem involving the modified Golden Rule is proved. That is, the underlying path of capital accumulation is asymptotically efficient in the sense of consumption maximization. We focus on asymptotic turnpike theorems and our turnpike theorem only relies on the requirement that the modified Golden-Rule path of capital accumulation is reachable in any almost surely finite Markov time. Finally, it is asserted that the modified Golden-Rule path of capital accumulation indeed provides us with a robust turnpike under very weak assumptions.
Contents
Specific patterns in portfolio analysis
A turnpike theorem involving a modified Golden Rule
General aspects regarding the evolution of GDP in Romania
Interday drifts in opening stock returns
Entrepreneurship among higher education graduates in 13 European countries
Innovative methods to analyze the stock market in Romania. Studying the volatility of the Romanian stock market with the ARCH and GARCH models using the “R” software
Anomalies on the capital markets from the former communist European countries
Prerequisites for modeling price and return data series for the Bucharest Stock Exchange
Between fiscal discipline and economic recovery. The solutions problem
Origin of the product and the buying decision