Monotonicity and Continuity of the Critical Capital Stock in the Dechert-Nishimura Model
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.
Dechert-Nishimura model; nonconvexity; optimal growth; critical capital stock; threshold
C61; D90; O41
School of Social Sciences, Waseda University, Japan.
RIEB, Kobe University
Rokkodai-cho, Nada-ku, Kobe
KIER, Kyoto University, Japan.