Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model

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Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model. / Bambi, M.; Fabbri, G.; Gozzi, F.

In: Economic Theory, Vol. 50, No. 3, 08.2012, p. 635-669.

Research output: Contribution to journalArticlepeer-review

Harvard

Bambi, M, Fabbri, G & Gozzi, F 2012, 'Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model', Economic Theory, vol. 50, no. 3, pp. 635-669. https://doi.org/10.1007/s00199-010-0577-3

APA

Bambi, M., Fabbri, G., & Gozzi, F. (2012). Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model. Economic Theory, 50(3), 635-669. https://doi.org/10.1007/s00199-010-0577-3

Vancouver

Bambi M, Fabbri G, Gozzi F. Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model. Economic Theory. 2012 Aug;50(3):635-669. https://doi.org/10.1007/s00199-010-0577-3

Author

Bambi, M. ; Fabbri, G. ; Gozzi, F. / Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model. In: Economic Theory. 2012 ; Vol. 50, No. 3. pp. 635-669.

Bibtex - Download

@article{c288e25028514ea1976723d8a182f3a1,
title = "Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model",
abstract = "In this paper, the dynamic programming approach is exploited in order to identify the closed loop policy function, and the consumption smoothing mechanism in an endogenous growth model with time to build, linear technology and irreversibility constraint in investment. Moreover, the link among the time to build parameter, the real interest rate, and the magnitude of the smoothing effect is deeply investigated and compared with what happens in a vintage capital model characterized by the same technology and utility function. Finally, we have analyzed the effect of time to build on the speed of convergence of the main aggregate variables.",
keywords = "Time-to-build, AK model, Dynamic programming, Optimal strategies, Closed loop policy, E22, E32, O40",
author = "M. Bambi and G. Fabbri and F. Gozzi",
year = "2012",
month = aug,
doi = "10.1007/s00199-010-0577-3",
language = "English",
volume = "50",
pages = "635--669",
journal = "Economic Theory",
issn = "1432-0479",
publisher = "Springer New York",
number = "3",

}

RIS (suitable for import to EndNote) - Download

TY - JOUR

T1 - Optimal Policy and Consumption Smoothing Effect in the Time to Build AK Model

AU - Bambi, M.

AU - Fabbri, G.

AU - Gozzi, F.

PY - 2012/8

Y1 - 2012/8

N2 - In this paper, the dynamic programming approach is exploited in order to identify the closed loop policy function, and the consumption smoothing mechanism in an endogenous growth model with time to build, linear technology and irreversibility constraint in investment. Moreover, the link among the time to build parameter, the real interest rate, and the magnitude of the smoothing effect is deeply investigated and compared with what happens in a vintage capital model characterized by the same technology and utility function. Finally, we have analyzed the effect of time to build on the speed of convergence of the main aggregate variables.

AB - In this paper, the dynamic programming approach is exploited in order to identify the closed loop policy function, and the consumption smoothing mechanism in an endogenous growth model with time to build, linear technology and irreversibility constraint in investment. Moreover, the link among the time to build parameter, the real interest rate, and the magnitude of the smoothing effect is deeply investigated and compared with what happens in a vintage capital model characterized by the same technology and utility function. Finally, we have analyzed the effect of time to build on the speed of convergence of the main aggregate variables.

KW - Time-to-build

KW - AK model

KW - Dynamic programming

KW - Optimal strategies

KW - Closed loop policy

KW - E22

KW - E32

KW - O40

UR - http://www.scopus.com/inward/record.url?scp=84864413262&partnerID=8YFLogxK

U2 - 10.1007/s00199-010-0577-3

DO - 10.1007/s00199-010-0577-3

M3 - Article

VL - 50

SP - 635

EP - 669

JO - Economic Theory

JF - Economic Theory

SN - 1432-0479

IS - 3

ER -