Dynamic Programming of Economic Growth

Roy Radner

Chapter Chapter 4 in Activity Analysis in the Theory of Growth and Planning, 1967, pp 111-141 from Palgrave Macmillan

Abstract: Abstract In the present paper a class of problems of optimal economic growth is formulated in terms of the ‘functional equation’ approach of dynamic programming (Bellman, 1957).2 A study is made of the continuity and concavity properties of the state valuation function, i.e. the function indicating the maximum total discounted welfare (utility) that can be achieved starting from a given initial state of the economy. Under suitable conditions this function is characterized by a certain functional equation. Both the cases of a finite and an infinite planning horizon are treated, the latter case being discussed under the assumption of constant technology and tastes. Here iteration of a certain transformation associated with the functional equation is shown to provide convergence to the state valuation function. Exact solutions are given for the case of linear-logarithmic production and welfare functions.

Date: 1967
References: Add references at CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:intecp:978-1-349-08461-6_4

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349084616

DOI: 10.1007/978-1-349-08461-6_4

Access Statistics for this chapter

More chapters in International Economic Association Series from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().