On sustainable growth and collapse: Optimal and adaptive paths

Dawid H, Day RH (2007)
JOURNAL OF ECONOMIC DYNAMICS & CONTROL 31(7): 2374-2397.

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Zeitschriftenaufsatz | Veröffentlicht | Englisch
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Abstract / Bemerkung
We consider economic growth in the presence of a minimal survival consumption level when preferences are lexicographic giving highest priority to the survival of the current and then all future generations. Knowledge of production is incomplete so future output made possible by current saving must be estimated. The resulting capital accumulation path is compared with the inter-temporally optimal one with full knowledge of the production function. Although previous results with the standard utility function show that for sufficiently strong discounting the adaptive strategy converges to the optimal path, in the present case in several scenarios the effect of adaptive economizing under incomplete information is drastic leading to demise of the economy although long-run survival would be possible. (C) 2006 Elsevier B.V. All rights reserved.
Erscheinungsjahr
Zeitschriftentitel
JOURNAL OF ECONOMIC DYNAMICS & CONTROL
Band
31
Zeitschriftennummer
7
Seite
2374-2397
ISSN
PUB-ID

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Dawid H, Day RH. On sustainable growth and collapse: Optimal and adaptive paths. JOURNAL OF ECONOMIC DYNAMICS & CONTROL. 2007;31(7):2374-2397.
Dawid, H., & Day, R. H. (2007). On sustainable growth and collapse: Optimal and adaptive paths. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 31(7), 2374-2397. doi:10.1016/j.jedc.2006.05.014
Dawid, H., and Day, R. H. (2007). On sustainable growth and collapse: Optimal and adaptive paths. JOURNAL OF ECONOMIC DYNAMICS & CONTROL 31, 2374-2397.
Dawid, H., & Day, R.H., 2007. On sustainable growth and collapse: Optimal and adaptive paths. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 31(7), p 2374-2397.
H. Dawid and R.H. Day, “On sustainable growth and collapse: Optimal and adaptive paths”, JOURNAL OF ECONOMIC DYNAMICS & CONTROL, vol. 31, 2007, pp. 2374-2397.
Dawid, H., Day, R.H.: On sustainable growth and collapse: Optimal and adaptive paths. JOURNAL OF ECONOMIC DYNAMICS & CONTROL. 31, 2374-2397 (2007).
Dawid, Herbert, and Day, Richard H. “On sustainable growth and collapse: Optimal and adaptive paths”. JOURNAL OF ECONOMIC DYNAMICS & CONTROL 31.7 (2007): 2374-2397.