Sequence of techniques

This paper analyzes the sequence of techniques in an explicitly dynamic version of the Dobb-Sen choice of techniques model. It is proven that when the modern (capital intensive) technique dominates in an optimal full employment steady state, traditional capital accumulation is characteristic of an optimal path in the labor surplus phase when: (1) traditional capital has the higher maximal growth rate and (2) the initial capital stock is sufficiently poor. The switch date from traditional to modern capital accumulation is shown to be a function of the maximal growth rate and steady shadow price of labor for each technique and the optimal phasing out of traditional capital is characterized. These results are placed in the context of the choice of techniques controversy between Dobb, Sen and Kalecki and its relevance to early Soviet economic development.     

Heterogeneity in social values and capital accumulation in a changing world

In a society characterized by a multitude of heterogeneous agents and a large number of possibly immaterial goods, each one having distinct social and personal values, we study the impact of these relative values on intergenerational capital accumulation, as a function of economic and social parameters such as capital mobility, productivity and personal and social values discrepancies. Each agent is modelled by a one-period production function and a two-period intertemporal utility. Agents live, produce and consume over one period, but optimize over two periods, so providing a remaining stock of goods for the next generation. This creates a dynamics in capital accumulation depending on social and individual values. A threshold appears in capital stock accumulation that depends on personal and social values’ volatilities, and below which the initial stock will be depleted. Whereas volatility in social values increases the threshold, impairing capital accumulation, adverse shocks in goods’ values may reverse the dynamics of the accumulation process. Finally, capital mobility specifically favors forerunners, but capital accumulation in one or several sectors may shift social values in their direction, at the expense of other sectors.

     

Optimal Growth with Public Capital and Public Services

We characterize optimal economic growth in an endogenous growth model in which production requires public capital (a stock) and public services (a flow) in addition to private capital and labor. We analyze the comparative static effects of changes in the fundamental technological and preference parameters of the model on the optimal values of several variables, such as the optimal rate of growth and the optimal allocation of resources among consumption, the provision of public services, and investment in public and private capital. We show that the general optimal path converges in finite time to the balanced growth optimal path. We relate our paper to important contributions to the existing literature by obtaining them as special cases of our model.     

Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model

We show that the critical capital stock of the Dechert and Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.     

Feasibility and optimality of the initial capital stock in the Ramsey vintage capital model

Using a discrete-time version of the Ramsey Vintage Capital Model we provide a characterization of the set of initial capital stocks compatible with a predefined scrapping time, given the rate of technical progress and the level of capital productivity. Each profile of initial capital stock in that set generates a complete infinite horizon feasible capital path. From that characterization, we prove the existence of a minimum value for the scrapping time of the machines compatible with the rate of technological progress. Moreover, for each level of capital productivity, there exists an upper bound for the technological progress which allows the existence of feasible capital paths with full employment. Finally, we transform the infinite horizon dynamic programming problem into one of finite dimension. We use this to find the optimal lifetime for the machines as well as the optimal composition of the initial capital stocks. A numerical example shows that, in accordance with the infinite horizon approach to the problem, the increase in the rate of technological progress leads to a decrease in optimal scrapping time of capital goods.     

Pollution,mortality and time consistent abatement taxes

We study dynamically consistent policy in a neoclassical overlapping generations growth model where pollution externalities undermine health but are mitigated via tax-financed abatement. With arbitrarily constant taxation, two steady states arise: an unstable ‘poverty trap’ and a ‘neoclassical’ steady state near which the dynamics might either be monotonically convergent or oscillating. When the planner chooses a time consistent abatement path that maximizes a weighted intergenerational sum of expected utility, the optimal tax is zero at low levels of capital and then a weakly increasing function of the capital stock. The non-homogeneity of the tax function along with its feedback effect on savings induces additional steady states, stability reversals and oscillations.     

Note on positive lower bound of capital in the stochastic growth model

In the context of the classical stochastic growth model, we provide a simple proof that the optimal capital sequence is strictly bounded away from zero whenever the initial capital is strictly positive. We assume that the utility function is bounded below and the shocks affecting output are bounded. However, the proof does not require an interval shock space, thus, admitting both discrete and continuous shocks. Further, we allow for finite marginal product at zero capital. Finally, we use our result to show that any optimal capital sequence converges globally to a unique invariant distribution, which is bounded away from zero.     

Trade,competitiveness and investment: an empirical assessment

ABSTRACT

The Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.     

A two sector endogenous growth model with habit formation

In this paper, we study an endogenous growth model with physical and human capital in which consumption habits enter the utility function multiplicatively. We show that although the utility function with multiplicative habits is nonconcave and unbounded, an interior optimal growth path still exists, it is uniquely determined and it converges to a balanced growth path. We also find that habit formation in consumption lowers the convergence speed of the optimal path toward the balanced growth path.     

变质物品考虑资金时值和滞后支付时的库存研究

研究了变质物品在考虑资金时间价值并且采购费允许滞后支付时的最优经济订货批量问题。建立了变质物品在需求率为库存水平的线性函数,计划时域内允许缺货且短缺量完全拖后,并且考虑资金的时间价值和采购费允许滞后支付时的最优库存决策模型。给出了模型最优解存在的必要条件和求解算法,通过一个算例说明了模型的求解过程。     

On the smoothness of optimal paths II: some local turnpike results

We study the local turnpike property for two classes of infinite-horizon discrete-time deterministic maximization problems which have common applications, e.g., optimal growth theory. We follow a functional-analytic approach and rely on an implicit function theorem for the space of the sequences which converge to zero. We shall assume the existence of an optimal path which is not necessarily a steady-state. Relying on material developped in Blot and Crettez (Decis Econo Finance 27:1–34, 2004), “On the smoothness of optimal paths” Decis Econ Finance, 21:1–34, 2004), we provide conditions under which a variation in the initial conditions (i.e., capital stock and discount rate) yields an optimal solution which converges toward a reference solution when time becomes infinite. We also provide new results on bounded solutions of difference equations. We gratefully thank the editor, Silvano Holzer, and two anonymous referees for remarks and advices on a previous version of this paper.     

Capital utilization and capital accumulation: Theory and evidence

A firm may acquire additional capital input by purchasing new capital or by increasing the utilization of its current capital. The margin between capital accumulation and capital utilization is studied in a model of dynamic factor demand where the firm chooses capital, labour and their rates of utilization. A direct measure of capital utilization-the work week of capital-is incorporated into the theory and estimates. The estimates imply that capital stock is costly to adjust while the work week of capital is essentially costless to adjust. The estimated response of the capital stock to changes in its price and in the required rate of return is more rapid than found in other estimates.     

Delivery lags and buffer stocks in the theory of investment by the firm

This paper contains a dynamic model of a firm holding a stock of unfilled orders for output while facing a fixed delivery lag attached to acquiring new capital goods. The model leads to a two-stage optimal control problem where the initial time interval corresponds to the Marshallian short-run and the second interval is the period during which deliveries of capital goods may arrive. Optimality criteria are provided for both time intervals and the behavior of the firm is characterized along both adjustment paths. The short-run decisions of the firm are shown to be tied to long-run decisions planned by the firm.     

Learning by doing,endogenous discounting and economic development

In this paper, we focus on a growth model where the discount rate is decreasing in capital accumulation and endogenous growth is made possible through learning by doing, knowledge accumulation being a by-product of gross investment. In such a model, the utility function has to be restricted to take positive values implying that the elasticity of marginal utility is lower than one. The presence of endogenous discounting generates a steady-state of stagnation which can be saddle-path stable or unstable depending on the marginal productivity of knowledge. In the case of long run growth, the fact that the elasticity of marginal utility is lower than one implies the existence of two asymptotic balanced growth paths: the one with the higher growth rate being a saddle point while the one with the lower growth rate not being a saddle point. We also study the optimal solution which is characterized by a unique balanced growth path. The policy consists as usual in subsidizing investment in order to internalize the externality.     

Effects of an anticipated expansion in international public goods on public capital accumulation

This paper presents a generic model to include public capital accumulation and the services of international public goods provided by a neighbor country. It examines the long-run and short-run responses of private and public capital accumulation in the home country to an anticipated increase in international public goods. It is found that the home economy in effect cuts its public capital stock, but keeps an unchanged private capital stock in the long run when a neighbor commits itself to expanding the stock of public goods in the future. The key factor determining the short-run responses of the home country is the extent to which it will match its government spending with a neighbor country's policy, which is associated with the relative difference between the marginal utility of consumption and that of home public capital affected by an increase in international public goods.     

城市资本存量模型分析

文章研究城市资本市场中资本存量的问题,建立了城市人均资本存量模型,反映了资本存量与各影响因素的相关关系.利用该模型对上海市的人均资本存量进行了分析.该模型具有预测作用,有助于城市管理主体制定城市发展政策.     

社会责任投资与价值投资相悖吗?——基于国际经验的比较

社会责任投资促进了公司绩效评价模式的变革。从美国和亚太地区的经验来看,社会责任投资的整体表现更好;社会责任形象较好公司股票价格表现更佳;强有效的资本市场一方面将推动社会责任形象好的公司股票获得更高估值,另一方面也将促使上市公司在社会责任领域投入更多资源。长远来看,社会责任投资与价值投资并不相悖。社会责任投资在中国的发展之路还属于起步阶段,中国上市公司对企业社会责任持有非常积极的观点,但中国资本市场并没有给企业社会责任积极评价。     

Stock markets,banks and the sources of economic growth in low and high income countries

This paper studies the effects of stock markets and banks on the sources of economic growth, productivity and capital accumulation, using a large cross country panel that includes high- and low-income countries. Results show that, in low-income countries, banks have a sizable positive effect on capital accumulation. We find that stock markets, however, have not contributed to capital accumulation or productivity growth in these countries. Given the emphasis that has been placed in developing equity markets in developing countries, these findings are somewhat surprising. Conversely, in high-income countries, stock markets are found to have sizable positive effects on both productivity and capital growth, while banks only affect capital accumulation.     

我国公共投资固定资本存量最优规模实证分析

以改进永续盘存法对我国1952-2009年的公共投资与民间投资固定资本存量进行了测算,然后借助柯布—道格拉斯(Cobb-Douglas)生产函数对我国公共投资的最佳规模进行了实证分析,发现目前我国公共投资固定资本存量占GDP的比重远远超过了26.83%的最优规模。据此分析了我国公共投资规模超标的原因,并提出了改进建议。     

On the optimal size of Social Security in the presence of a stock market

The paper develops a stylized overlapping generations economy with random production and a stock market. The impact of a Social Security system on production, asset markets, and consumer welfare is analyzed. It is shown that any reduction in the contribution rate fosters capital accumulation and increases asset prices, wages, and production output. Different welfare criteria are applied to determine the optimal size of Social Security. It is shown that there exists a unique contribution rate which is long-run optimal, socially optimal, and time-consistent in the sense that no generation has an incentive to change it.