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A NOTE ON AN EXTENSION OF A CLASS OF SOLUTIONS TO DYNAMIC PROGRAMMING PROBLEMS ARISING IN ECONOMIC GROWTH

Published online by Cambridge University Press:  27 January 2011

Jürgen Antony  and
Alfred Maußner
Jürgen Antony*
Affiliation:
CPB Netherlands Bureau for Economic Policy Analysis
Alfred Maußner
Affiliation:
University of Augsburg
*
Address correspondence to: Jürgen Antony, CPB Netherlands Bureau for Economic Policy Analysis, Van Stolkweg 14, NL-2585 JR, the Hague, the Netherlands; e-mail: [email protected].
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Abstract

This note extends the findings of Benhabib and Rusticchini [Journal of Economic Dynamics and Control 18, 807–813 (1994)], who provide a class of dynamic stochastic general equilibrium (DSGE) models whose solution is characterized by a constant savings rate. We show that this class of models may be interpreted as a standard–representative agent DSGE model with costly adjustment of capital.

Keywords

Capital and Labor SubstitutionDynamic ProgrammingGrowthNumerical Solutions of DSGE Models
Type
Notes
Information
Macroeconomic Dynamics , Volume 16 , Issue 3 , June 2012 , pp. 472 - 476
Copyright
Copyright © Cambridge University Press 2011

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References

REFERENCES

Benhabib, J. and Rustichini, A. (1994) A note on a new class of solutions to dynamic programming problems arising in economic growth. Journal of Economic Dynamics and Control 18, 807–813.CrossRefGoogle Scholar
Heer, B. and Maußner, A. (2009) Dynamic General Equilibrium Models: Computational Methods and Applications, 2nd ed.Berlin: Springer.Google Scholar
McCallum, B.T. (1989) Real business cycle models. In Barro, R. (ed.), Modern Business Cycle Theory. Cambridge, MA: Harvard University Press.Google Scholar