Robust Turnpikes Deduced by the Minimum-Time Needed toward Economic Maturity
|Title:||Robust Turnpikes Deduced by the Minimum-Time Needed toward Economic Maturity|
|Journal or Publication Title:|
Czech Economic Review, 9, 1, pp. 49-74
|Uncontrolled Keywords:||Stochastic growth, economic maturity, minimum-time objective, asymptotic turnpike theorem, neighborhood turnpike theorem, robustness|
In the paper, a one-sector neoclassical model with stochastic growth has been constructed. The major goal of the study is to characterize relevant mathematical properties of efficient development paths for underdeveloped economies. Since economic maturity is a reasonable objective, we mainly focus on the long-run features of economic development. Indeed, the notion of economic maturity is well-defined in the model, and also a thorough characterization of the minimum time needed toward economic maturity is offered with intuitive interpretations discussed. Moreover, it is confirmed that the capital-labor ratio corresponding to the state of economic maturity provides us with a robust turnpike of the optimal path of capital accumulation.