A Model of Optimal Growth Strategy

Philippe Askenazy and Cuong Le van

DELTA Working Papers from DELTA (Ecole normale supérieure)

Abstract: In this paper we present an optimal growth model with convex-concave technology, for an open developing country. The latter may choose to produce consumption goods by borrowing on capital markets. We prove there exists two non trivial steady states. An optimal path converges either to 0 or to the high stedy-state. That depends on the levels of the initial debt and/or of the debt constraint. We prove also there exists a poverty trap if the time preference is very high.

Keywords: ECONOMIC DEVELOPMENT; ECONOMETRICS (search for similar items in EconPapers)
JEL-codes: C41 C61 D92 O12 (search for similar items in EconPapers)
Pages: 37 pages
Date: 1997
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Published in Journal of Economic Theory, 1999, vol. 85, no. 1, pp. 27-54

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Journal Article: A Model of Optimal Growth Strategy (1999)
Working Paper: A model of optimal growth strategy (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:del:abcdef:97-27

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