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Adaptive Rolling Plans Are Good

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  • Maćkowiak, Piotr

Abstract

Here we prove the goodness property of adaptive rolling plans in a multisector optimal growth model under decreasing returns in deterministic environment. Goodness is achieved as a result of fast convergence (at an asymptotically geometric rate) of the rolling plan to balanced growth path. Further on, while searching for goodness, we give a new proof of strong concavity of an indirect utility function – this result is achieved just with help of some elementary matrix algebra and differential calculus.

Suggested Citation

  • Maćkowiak, Piotr, 2009. "Adaptive Rolling Plans Are Good," MPRA Paper 42043, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42043
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    indirect utility function; good plans; adaptive rolling-planning; multisector model;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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