On the Consequences of Generically Distributed Investments on Flexible Projects in an Endogenous Growth Model

Mauro Bambi (), Cristina Di Girolami, Salvatore Federico () and Fausto Gozzi

Discussion Papers from Department of Economics, University of York

Abstract: In this paper we argue that differences in the investment projects’ features can help to explain the observed differentials in output growth and in output volatility across countries. This result is achieved by studying analytically an endogenous growth model where investments are (generically) distributed over multi-period flexible projects leading to new capital once completed. Recently developed techniques in dynamic programming are adapted and used to fully characterized the balanced growth path and transitional dynamics of this model. Based on this analytical ground, several numerical exercises are performed to show how the key results of our analysis are also quantitatively relevant.

Keywords: investment projects; distributed delays; optimal control; dynamic programming; infinite dimensional problem. (search for similar items in EconPapers)
JEL-codes: E22 E32 O40 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-dge, nep-gro, nep-mac and nep-ppm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:yor:yorken:14/15

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