Skiba Points for Small Discount Rates

Florian Wagener

Journal of Optimization Theory and Applications, 2006, vol. 128, issue 2, No 3, 277 pages

Abstract: Abstract The present article uses perturbation techniques to approximate the value function of an economic minimization problem for small values of the discount rate. This can be used to obtain the approximate location of the Skiba states in the problem; these are states for which there are two distinct optimal state trajectories, converging to different optimal steady states. It is shown that the sets of these indifference thresholds are locally smooth manifolds. For a simple example, all relevant quantities are computed explicitly. Moreover, the approximation can be used to obtain parameter-dependent approximations to the indifference manifolds.

Keywords: Multiple optimal equilibria; indifference points; perturbation methods; optimal bifurcations (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://link.springer.com/10.1007/s10957-006-9028-5 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: Skiba points for small discount rates (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joptap:v:128:y:2006:i:2:d:10.1007_s10957-006-9028-5

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10957/PS2

DOI: 10.1007/s10957-006-9028-5

Access Statistics for this article

Journal of Optimization Theory and Applications is currently edited by Franco Giannessi and David G. Hull

More articles in Journal of Optimization Theory and Applications from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().