Optimal Investment with the Lags,
Abstract
Recent papers on optimal growth have considered models exploring optimal allocation of resources between consumption and investment. In these, investment in a capital good results in an instant increase in that capital good. It is more realistic to assume that there is some time lag before investment results in an actual increase in the capital good. The problem considered involves two capital goods, each with a different rate of productivity. A lag in the time for investment to be transformed into new capital is longer for one than for the other, what may be the most efficient way to allocate investment given that some of the goods must be used for present consumption. An example where such considerations are critical is the case of a developing country. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 18, 1970
- Accession Number
- AD0716583
Entities
People
- Andrew Whinston
- Edna Loehman
- Mohamed El-hodiri