Title
Monotonicity and Continuity of the Critical Capital Stock in the Dechert-Nishimura Model
Abstract
We show that the critical capital stock of the Dechert-Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.
Keywords
Dechert-Nishimura model; nonconvexity; optimal growth; critical capital stock; threshold
JEL Classification
C61; D90; O41
Inquiries
Ken-Ichi AKAO
School of Social Sciences, Waseda University, Japan.
Takashi KAMIHIGASHI
RIEB, Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Kazuo NISHIMURA
KIER, Kyoto University, Japan.
School of Social Sciences, Waseda University, Japan.
Takashi KAMIHIGASHI
RIEB, Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: +81-78-803-7036
FAX: +81-78-803-7059
Kazuo NISHIMURA
KIER, Kyoto University, Japan.