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Steady state properties of multi‐state economic models

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  • Yacov Tsur
  • Amos Zemel

Abstract

A simple method to derive optimal steady states of multi‐state dynamic economic systems with minimal assumptions on the underlying processes is developed. This is accomplished by an n‐dimensional function defined over the n‐dimensional state space in terms of the model's primitives. The location and stability properties of optimal steady state candidates are characterized by the roots and derivatives of this function. A resource management example illustrates the simplicity and applicability of the method. Les propriétés des modèles économiques multi‐états en régime permanent. On développe une méthode simple pour dériver un régime permanent optimal de systèmes économiques dynamiques multi‐états à l'aide d'un minimum de postulats. Cela est accompli en définissant une fonction à n‐dimensions sur un espace n‐dimensionnel en termes des fondements primitifs du modèle. Les propriétés de localisation et de stabilité des candidats au rôle de régime permanent sont caractérisées par les racines et les dérivées de cette fonction. Un exemple de gestion des ressources illustre la simplicité et l'applicabilité de la méthode.

Suggested Citation

  • Yacov Tsur & Amos Zemel, 2017. "Steady state properties of multi‐state economic models," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(2), pages 506-521, May.
  • Handle: RePEc:wly:canjec:v:50:y:2017:i:2:p:506-521
    DOI: 10.1111/caje.12267
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    1. Yacov Tsur & Amos Zemel, 2017. "Coping with Multiple Catastrophic Threats," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 175-196, September.

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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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