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Characterization of the turnpike property of optimal paths in the aggregative model of intertemporal allocation
Author(s) -
Mitra Tapan
Publication year - 2005
Publication title -
international journal of economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.351
H-Index - 11
eISSN - 1742-7363
pISSN - 1742-7355
DOI - 10.1111/j.1742-7363.2005.00016.x
Subject(s) - characterization (materials science) , economics , property (philosophy) , mathematical economics , stability (learning theory) , point (geometry) , competitive equilibrium , econometrics , mathematics , mathematical optimization , computer science , philosophy , materials science , geometry , epistemology , machine learning , nanotechnology
The present paper provides a complete characterization of the turnpike property of optimal paths in the (reduced form) aggregative model of intertemporal allocation. The characterization allows one to identify precisely the bifurcation point between globally stable and cyclical long‐run optimal behavior. The complete characterization result is used to evaluate several sufficient conditions for global asymptotic stability of optimal paths that have been proposed in the published literature. It is also used to examine sufficient conditions for the emergence of competitive equilibrium cycles in two‐sector models.