On a closed-form solution to the stochastic Lucas–Uzawa model

Ryoji Hiraguchi ()

Journal of Economics, 2013, vol. 108, issue 2, 144 pages

Abstract: Bucci et al. (J Econ 103:83–99, 2011 ) argue that under two parametric restrictions, there exists a closed-form solution path to the two-sector endogenous growth model of Lucas–Uzawa. However, they assume that the value function is a function of both the current and the initial values of the state variables. As Wälde (J Econ Dyn Control 35:616–622, 2011a ) argues, the value function should depend only on the current state variables when the technology follows a geometric Brownian motion. I follow Wälde (J Econ Dyn Control 35:616–622, 2011a ) and obtain, under some inequality constraints, a different value function. Copyright Springer-Verlag 2013

Keywords: Endogenous growth; Closed-form solution; Value function; Brownian motion; E5 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:108:y:2013:i:2:p:131-144

DOI: 10.1007/s00712-012-0295-3

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