Turnpike theory: a current perspective

M. Khan and Adriana Piazza

from Palgrave Macmillan

Abstract: This 2012 perspective of the 1987 Palgrave entry on ‘turnpike theory’ highlights the subsequent development of the subject in the light of a critical re-reading of the original. It distinguishes the 1949 conception, a response of Samuelson to a 1945 von Neumann challenge to the reception of his growth model in the economic literature, from the more capacious 1976 outline furnished by McKenzie. Thus, it differentiates asymptotic convergence of infinite-horizon optimal programs from what it terms their finite-horizon, classical turnpike counterparts. It identifies a move from the investigation of general theorems to a more detailed working of simple examples, and reports results on specific models of ‘choice of technique’ in development planning, and of lumber extraction in the economics of forestry. Drawing on ongoing advances in the field of dynamical systems, it sees such models as both litmus tests of the general theory and as productive settings to study the rationalisability of policy functions and a ‘folk theorem of intertemporal resource allocation'. The entry concludes with brief speculative remarks for future directions.

Keywords: asymptotic convergence; classical turnpike theory; competitive equilibrium; development planning; discount factor; folk theorem; forest management; intertemporal resource allocation; middle-early-late turnpike; neighborhood turnpike theorem; optimal programs; Radner's value-loss method; Ramsey model; rationalisability; von Neumann growth model (search for similar items in EconPapers)
JEL-codes: C62 D90 Q23 (search for similar items in EconPapers)
Date: 2012
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.dictionaryofeconomics.com/article?id=pde2012_T000256 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:pal:dofeco:v:6:year:2012:doi:3878

Ordering information: This item can be ordered from
http://www.dictionar ... lp/faq#_Toc198623697

Access Statistics for this chapter

More chapters in The New Palgrave Dictionary of Economics from Palgrave Macmillan
Bibliographic data for series maintained by Sheeja Sanoj ( this e-mail address is bad, please contact ).