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On the non-existence of optimal programs in the Robinson-Solow-Srinivasan (RSS) model

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  • Khan, M. Ali
  • Piazza, Adriana

Abstract

We show that in the 2-sector RSS model, there is no optimal program for any initial stock when the felicity function is linear and the marginal rate [xi] equals unity. This settles a conjecture, unresolved since 2005.

Suggested Citation

  • Khan, M. Ali & Piazza, Adriana, 2010. "On the non-existence of optimal programs in the Robinson-Solow-Srinivasan (RSS) model," Economics Letters, Elsevier, vol. 109(2), pages 94-98, November.
    • Handle: RePEc:eee:ecolet:v:109:y:2010:i:2:p:94-98
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    References listed on IDEAS

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    1. M. Khan & Alexander Zaslavski, 2007. "On a Uniform Turnpike of the Third Kind in the Robinson-Solow-Srinivasan Model," Journal of Economics, Springer, vol. 92(2), pages 137-166, October.
    2. M. Ali Khan & Tapan Mitra, 2007. "Optimal Growth In A Two‐Sector Rss Model Without Discounting: A Geometric Investigation," The Japanese Economic Review, Japanese Economic Association, vol. 58(2), pages 191-225, June.
    3. M. Khan & Alexander Zaslavski, 2010. "On locally optimal programs in the Robinson–Solow–Srinivasan model," Journal of Economics, Springer, vol. 99(1), pages 65-92, February.
    4. Metcalf, Christopher J., 2008. "The dynamics of the Stiglitz policy in the RSS model," Chaos, Solitons & Fractals, Elsevier, vol. 37(3), pages 652-661.
    5. Khan, M. Ali & Zaslavski, Alexander J., 2009. "On existence of optimal programs: The RSS model without concavity assumptions on felicities," Journal of Mathematical Economics, Elsevier, vol. 45(9-10), pages 624-633, September.
    6. David Gale, 1967. "On Optimal Development in a Multi-Sector Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(1), pages 1-18.
    7. Kazuo Nishimura & Makoto Yano, 2012. "Non-linear Dynamics and Chaos in Optimal Growth: An Example," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 127-150, Springer.
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    9. Lionel W. McKenzie, 2005. "Classical General Equilibrium Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633302, December.
    10. M. Ali Khan & Alexander J. Zaslavski, 2009. "On Locally Optimal Programs in The RSS (Robinson-Solow-Srinivasan) Model," Discussion Papers Series 396, School of Economics, University of Queensland, Australia.
    11. W. A. Brock, 1970. "On Existence of Weakly Maximal Programmes in a Multi-Sector Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 37(2), pages 275-280.
    12. McKenzie, Lionel W., 2005. "Optimal economic growth, turnpike theorems and comparative dynamics," Handbook of Mathematical Economics, in: K. J. Arrow & M.D. Intriligator (ed.), Handbook of Mathematical Economics, edition 2, volume 3, chapter 26, pages 1281-1355, Elsevier.
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    Cited by:

    1. Fabbri, Giorgio & Faggian, Silvia & Freni, Giuseppe, 2015. "On the Mitra–Wan forest management problem in continuous time," Journal of Economic Theory, Elsevier, vol. 157(C), pages 1001-1040.
    2. Giorgio Fabbri & Silvia Faggian & Giuseppe Freni, 2016. "Non-Existence of Optimal Programs in Continuous Time," AMSE Working Papers 1630, Aix-Marseille School of Economics, France.
    3. Fabbri, Giorgio & Faggian, Silvia & Freni, Giuseppe, 2017. "Non-existence of optimal programs for undiscounted growth models in continuous time," Economics Letters, Elsevier, vol. 152(C), pages 57-61.

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