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Optimal growth with logarithmic utility1

Published online by Cambridge University Press:  17 August 2016

David Chappal
David Chappal*
Affiliation:
University of Liverpool
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Extract

Several optimal growth theorists have used a momentary utility function exihibiting constant elasticity of marginal utility. The usual formulation is

where U[·] = total per capita utiliy at time t, c(t) = per capita consumption at time t and v is a positive constant not equal to unity. Elasticity of marginal utility is given by

Type
Research Article
Information
Recherches Économiques de Louvain/ Louvain Economic Review , Volume 43 , Issue 2 , June 1977 , pp. 165 - 172
Copyright
Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 1977 

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Footnotes

1

The author is grateful for the many constructive comments received from Roger Latham and David Peel. Thanks are also due to an anonymous referee of an earlier version of this paper; his valuable advice has been incorporated in this revised version but the usual caveat applies.

References

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[3] Chakravarty, S. , and Manne, A.S., « Optimal Growth When the Instantaneous Utility Function Depends on the Rate of Change in Consumption », American Economic Review, 1968.Google Scholar
[4] SirHicks, John R., Capital and Growth, Oxford University Press, 1965.Google Scholar
[5] Koopmans, T.J., « On the Concept of Optimal Economic Growth » in « The Econometric Approach to Development Planning », Pontificia Academia Scienterum, Vatican, 1965.Google Scholar
[6] Kurz, M. , « The General Instability of a Class of Competitive Growth Processes », Review of Economic Studies, 1968.10.2307/2296545Google Scholar
[7] Tinbergen, J. , « Optimal Savings and Utility Maximisation over Time », Econometrica, 1960.10.2307/1907735Google Scholar