Optimality of a Linear Decision Rule in Discrete Time AK Model
Keyword(s):
Ak Model
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Abstract Surprisingly, formal proof on the optimality of a linear decision rule in the discrete time AK model with a CRRA utility function has not been established in the growth literature while that in the continuous time counterpart is well-established. This note fills such a gap: I provide a formal proof that consumption being linearly related to investment is a sufficient and necessary condition for Pareto optimality in the discrete time AK model.
2013 ◽
Vol 278-280
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pp. 1687-1691
2017 ◽
Vol 51
(1)
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pp. 42-49
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Keyword(s):
2017 ◽
Vol E100.C
(10)
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pp. 858-865
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Keyword(s):
Keyword(s):