Optimal programs and their price characterization in a multisector growth model with uncertainty

Author:
Nikolaos S. Papageorgiou

Journal:
Proc. Amer. Math. Soc. **122** (1994), 227-240

MSC:
Primary 90A16; Secondary 49K27, 49N15, 90A17, 93E20

MathSciNet review:
1195728

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Abstract: In this paper we examine a nonstationary multisector growth model with uncertainty in which future utilities are discounted. First we establish the existence of strongly optimal programs emanating from a given initial capital stock. Then we show that this optimal program is sustained by a system of prices so that the pair is competitive and a strong transversality condition holds. We also show that competitiveness and transversality imply optimality.

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Additional Information

DOI:
http://dx.doi.org/10.1090/S0002-9939-1994-1195728-X

Keywords:
Multisector growth model,
feasible program,
discount factor,
free disposability,
intertemporal utility,
support prices,
transversality condition

Article copyright:
© Copyright 1994
American Mathematical Society