IDEAS home Printed from https://ideas.repec.org/a/ier/iecrev/v34y1993i1p193-202.html
   My bibliography  Save this article

Optimal Patterns of Consumption and Development Expenditures in the Presence of Productivity Thresholds

Author

Listed:
  • Horowitz, Andrew W

Abstract

Standard growth and development models imply that steadily rising consumption will accompany development. When some inputs require a minimum stock before becoming productive, however, these appealing results may no longer hold. This paper characterizes optimal consumption and investment in a model with a traditional and modern technology and a lumpy modern factor. Rather than smooth, momentum building growth, the optimal program displays dramatic nonmonotonicities. In particular, the model predicts distinct modern and traditional investment regimes and an interval of falling aggreg ate consumption during the final transition from a traditional to a mode rn economy. Copyright 1993 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Horowitz, Andrew W, 1993. "Optimal Patterns of Consumption and Development Expenditures in the Presence of Productivity Thresholds," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 34(1), pages 193-202, February.
    • Handle: RePEc:ier:iecrev:v:34:y:1993:i:1:p:193-202
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0020-6598%28199302%2934%3A1%3C193%3AOPOCAD%3E2.0.CO%3B2-Y&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aubhik Khan & B. Ravikumar, 2002. "Costly Technology Adoption and Capital Accumulation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(2), pages 489-502, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:34:y:1993:i:1:p:193-202. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.