Optimal growth when consumption takes time

Journal article: This article analyzes a one-sector growth model where the consumption takes time. When the consumption takes time, the consumption set is compact and we meet satiety. However, we prove that dynamic constraints are binding. This result is crucial to prove that, under well-known assumptions in macroeconomic dynamic programming, the optimal path is monotonic and always converges to a unique nontrivial steady state as in the case where consumption is timeless.

Author(s)

Thai Ha‐huy, Cuong Le Van, Thi‐do‐hanh Nguyen

Journal
  • Journal of Public Economic Theory
Date of publication
  • 2020
Pages
  • 1442-1461
Version
  • 1
Volume
  • 22