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Generically distributed investments on flexible projects and endogenous growth

Author

Listed:
  • Mauro Bambi

    (University of York)

  • Cristina Girolami

    (Università di Pescara)

  • Salvatore Federico

    (Università di Firenze)

  • Fausto Gozzi

    (Università LUISS - Guido Carli)

Abstract

In this paper we study an endogenous growth model where investments are (generically) distributed over multi-period flexible projects leading to new capital once completed. Recently developed techniques in dynamic programming are adapted and used to unveil the global dynamics of this model. Based on this analytical ground, several numerical exercises are performed to show the quantitative relevance of the analytical findings with an emphasis on the relation between project features and economic growth and speed of convergence toward the balanced growth path.

Suggested Citation

  • Mauro Bambi & Cristina Girolami & Salvatore Federico & Fausto Gozzi, 2017. "Generically distributed investments on flexible projects and endogenous growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 63(2), pages 521-558, February.
    • Handle: RePEc:spr:joecth:v:63:y:2017:i:2:d:10.1007_s00199-015-0946-z
    DOI: 10.1007/s00199-015-0946-z
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    Cited by:

    1. Cristiano Ricci, 2023. "A non-invariance result for the spatial AK model," Papers 2311.06811, arXiv.org.
    2. Filippo de Feo & Salvatore Federico & Andrzej 'Swik{e}ch, 2023. "Optimal control of stochastic delay differential equations and applications to path-dependent financial and economic models," Papers 2302.08809, arXiv.org.

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    More about this item

    Keywords

    Endogenous growth; Investment projects; Distributed delays; Optimal control; Dynamic programming; Infinite dimensional problems;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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