Optimal pattern of technology adoption under embodiment with a finite planning horizon: A multi-stage optimal control approach

Çağrı Sağlam

No 2002031, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: By deriving the necessary conditions for a multi-stage discounted optimal control problem where the endogenous switching instants between regimes appear as an argument of the objective function and the state equation, we analyze the optimal pattern of technology adoption under embodiment with a finite planning horizon. The economy is characterized by the existence of an exogenously growing technology frontier and technology specific learning by doing. We obtain time varying durations for the adopted technologies to be in use due to finite planning horizon. We analyze numerically the effects of planing horizon, speed of learning, growth rate of technology and impatience rate on the optimal pattern.

Keywords: Multi-stage optimal control; technology adoption; learning by doing; embodiment (search for similar items in EconPapers)
JEL-codes: C63 E22 E32 O40 (search for similar items in EconPapers)
Pages: 26
Date: 2002-06-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2002031

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