Optimal accumulation in a small open economy with technological uncertainty

B-Tier
Journal: Economic Theory
Year: 1999
Volume: 13
Issue: 1
Pages: 207-219

Score contribution per author:

2.011 = (α=2.01 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

This paper analyzes the optimal allocation problem of a small trading country facing an uncertain technology. It is involved in production of many commodities. Differentiability cannot be guaranteed, hence, the Ramsey-Euler condition of optimality needs to be modified. From the optimality criterion, we derive a pair of conditions, which does not require differentiability. If "enough" uncertainty is allowed, the sequence of the distribution functions of investment expenditure converges uniformly to a unique invariant measure. In addition to the weak convergence of the stochastic process of investment expenditure we also have the sequences of the stochastic process of investment expenditure converging weakly.

Technical Details

RePEc Handle
repec:spr:joecth:v:13:y:1999:i:1:p:207-219
Journal Field
Theory
Author Count
1
Added to Database
2026-01-25