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On the Transition from Instantaneous to Time-Lagged Capital Accumilation: The Case of Leontief Type Production Functions
- Publication Year :
- 2005
- Publisher :
- Zentrum für Europäische Wirtschaftsforschung (ZEW) Mannheim, 2005.
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Abstract
- We formulate an optimal control capital accumulation model with a Leontief-type production function and an exogenously given time-lag between investment and the accumulation of the capital stock, to analyze the qualitative and quantitative influence of time-lags on the system dynamics. As known from the time-to-build literature, optimal investment paths for positive and finite time-lags are in general cyclical, in contrast to the monotonic optimal paths for instantaneous capital accumulation. We show that the transition between instantaneous and time-lagged capital accumulation is continuous, in the sense that the greater is the time-lag between investment and capital accumulation, the more likely and more pronounced becomes cyclical behavior of the optimal paths.
Details
- Language :
- English
- Database :
- OpenAIRE
- Accession number :
- edsair.od......1687..36f1579257f260da7b04448137239bf2