On optimal growth models when the discount factor is near 1 or equal to 1
Résumé
The aim of this paper is to fill the gap between intertemporal growth models when the discount factor beta is close to one and when it equals one.
We show that the value function and the policy function are continuous with respect both to the discount factor and the initial stock of capital
x0. We prove that the optimal policy g(x0) is differentiable and that Dg(x0) is continuous with respect to (beta, x0). As a by-product, a global
turnpike result is proved.
We show that the value function and the policy function are continuous with respect both to the discount factor and the initial stock of capital
x0. We prove that the optimal policy g(x0) is differentiable and that Dg(x0) is continuous with respect to (beta, x0). As a by-product, a global
turnpike result is proved.
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