On choice of technique in the Robinson-Solow-Srinivasan model

M. Khan and Tapan Mitra

No 504, FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) from EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil)

Abstract: We report results on the optimal \choice of technique' in a model originally formulated by Robinson, Solow and Srinivasan (henceforth, the RSS model) and further discussed by Okishio and Stiglitz. By viewing this vintage-capital model without discounting as a speci c instance of the general theory of intertemporal resource allocation associated with Brock, Gale and McKenzie, we resolve longstanding conjectures in the form of theorems on the existence and price support of optimal paths, and of conditions suÆcient for the optimality of a policy rst identi ed by Stiglitz. We dispose of the necessity of these conditions in surprisingly simple examples of economies in which (i) an optimal path is periodic, (ii) a path following Stiglitz' policy is bad, and (iii) there is optimal investment in di erent vintages at di erent times. (129 words)

Date: 2003-10-08
New Economics Papers: this item is included in nep-ino
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: On choice of technique in the Robinson–Solow–Srinivasan model (2005)
Working Paper: On Choice of Technique in the Robinson-Solow-Srinivasan Model (2004)
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