The Economics of Orchards : An Exercise in Point - input , Flow - Output Capital Theory *

Abstract

This paper is concerned with the qualitative properties of optimal intertemporal programs in a model of point-input flow-output capital theory, when future utilities are discounted. Under a mild condition on the flow-output vector, we establish that optimal programs for every discount factor and every initial state (other than a unique stationary optimal state) will exhibit non-convergence. Furthermore, we provide a necessary and sufficient condition on the flow-output vector for which a neighborhood turnpike theorem holds; that is, long-run fluctuations on an optimal program are “small” when the discount factor is “close” to unity. Journal of Economic Literature Classification Numbers: 111, 131. ‘7 1991 Academic Press. Inc

Cite this paper

@inproceedings{Mitra1993TheEO, title={The Economics of Orchards : An Exercise in Point - input , Flow - Output Capital Theory *}, author={Tapan Mitra}, year={1993} }