OPTIMAL PATHS OF CAPITAL ACCUMULATION UNDER THE MINIMUM TIME OBJECTIVE
Abstract
The important question of investment criteria and optimal strategy of development has been discussed by various authors from many different points of view. In principle, a distinction can be made between "competitive" growth paths and "non-competitive" paths. In "competitive" paths we mean the growth path which is determined by a model in which decentralized structure of production and consumption is postulated; producers' expectation functions and profit maximization leading to demand function for capital is ex plicitly introduced; and consumers' preferences leading to a savings function completes the model. Once we depart from the deterministic competitive model, it becomes very unclear how much the economist can say about social development goals. If we allow the preference function of some planning board to determine the the optimal development strategy, we are, in fact, introducing political and military considerations, national pride, past experience of the nation and other sociological factors that mold the objectives of the nation. The model represents a closed economy in which foreign trade, government fiscal policy and technological change are excluded. The inclusion of foreign trade and technological changes are natural extensions of this work, while government policy is implicitly assumed in the statement of the objectives of the economy.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 18, 1963
- Accession Number
- AD0410363
Entities
People
- Mordecai Kurz
Organizations
- Stanford University