On choice of technique in the Robinson-Solow-Srinivasan model
Year: 2005
Type: article
Abstract: We report results on the optimal “choice of technique” in a model originally formulated by Robinson, Solow and Srinivasan. By viewing this model as a specific instance of the general theory of intertemporal resource allocation associated with Brock, Gale and McKenzie, we resolve long-standing conjectures in the form of theorems on the existence and price-support of optimal paths, and on their long-run behavior. We also examine policies, due to Stiglitz, as a cornerstone for a theory of transition dynamics in this model. We present examples to show that: (i) an optimal program can be periodic; (ii) a Stiglitz' program can be bad; and (iii) a Stiglitz production program can be non-optimal. We then provide sufficient conditions under which the policies proposed by Stiglitz coincide with optimal behavior.
Authors: M. Ali Khan, Tapan Mitra
Institutions: Johns Hopkins University, Cornell University
Language: English
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2167095466