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Classical Turnpike Theory and the Economics of Forestry

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Abstract

Classical turnpike theory, as originally conceived by Samuelson, pertains to optimal growth theory over a large but infinite time horizon with given initial and terminal stocks. In this paper, we present two turnpike results in the context of the economics of forestry with given initial and terminal forest configurations. Our results depart from the general theory in that they pertain to a transitional production set which does not satisfy the assumptions of inaction and free disposal, and rely on a recently-discovered non-interiority assumption on concave (not necessarily differentiable) benefit functions that implies, and is implied by, the asymptotic convergence of good programs.

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  • M. Ali Khan & Adriana Piazzaz, 2009. "Classical Turnpike Theory and the Economics of Forestry," Discussion Papers Series 397, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:397
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    1. Tapan Mitra & Henry Y. Wan, 1985. "Some Theoretical Results on the Economics of Forestry," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(2), pages 263-282.
    2. 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.
    3. 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.
    4. Salo, Seppo & Tahvonen, Olli, 2002. "On Equilibrium Cycles and Normal Forests in Optimal Harvesting of Tree Vintages," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 1-22, July.
    5. Mitra, Tapan & Wan, Henry Jr., 1986. "On the faustmann solution to the forest management problem," Journal of Economic Theory, Elsevier, vol. 40(2), pages 229-249, December.
    6. Lionel W. McKenzie, 2012. "turnpike theory," The New Palgrave Dictionary of Economics,, Palgrave Macmillan.
    7. M. Ali Khan & Adriana Piazza, 2010. "On uniform convergence of undiscounted optimal programs in the Mitra–Wan forestry model: The strictly concave case," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(1), pages 57-76, March.
    8. Samuelson, Paul A, 1976. "Economics of Forestry in an Evolving Society," Economic Inquiry, Western Economic Association International, vol. 14(4), pages 466-492, December.
    9. Majumdar, Mukul & Mitra, Tapan, 1994. "Periodic and Chaotic Programs of Optimal Intertemporal Allocation in an Aggregative Model with Wealth Effects," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 4(5), pages 649-676, August.
    10. Salo, Seppo & Tahvonen, Olli, 2003. "On the economics of forest vintages," Journal of Economic Dynamics and Control, Elsevier, vol. 27(8), pages 1411-1435, June.
    11. Roy Radner, 1961. "Prices and the Turnpike: III. Paths of Economic Growth that are Optimal with Regard only to Final States: A Turnpike Theorem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 28(2), pages 98-104.
    12. Mitra, Tapan, 2004. "Intergenerational Equity and the Forest Management Problem," Working Papers 04-17, Cornell University, Center for Analytic Economics.
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    1. Khan, M. Ali, 2016. "On a forest as a commodity and on commodification in the discipline of forestry," Forest Policy and Economics, Elsevier, vol. 72(C), pages 7-17.

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