Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: On the concept of optimal economic growth / Tjalling C. Koopmans, Cowles Foundation for research in Econimics at Yale University New Haven, Conn. - U.S.A.

Collection:: Economics Books

SEMAINE D ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC. 206 may be severe conflicts between our ethical notions and the analysis of certain kinds of growth models. His conclusion is that we must change our ethical notions. My preference would be to say that there is something wrong with the model. In either case a good deal of further thought seems called for. More particularly, one frequently in the theory of optimization over time encounters peculiar difficulties when one uses an infinite time horizon. Now, in fact, the device of the infinite horizon was probably originally introduced because the choice of a finite horizon is an arbitrary one and because with a finite horizon one has difficulty in deciding what to do about terminal capital stock. Infinite horizons were, however, introduced primarily as a convenience. They have in several contexts now been shown to lead to difficulties all associated with divergence of the improper integral obtained in the problem. Now this suggests to me that infinite horizons are not in fact the convenience they appear. The obvious conclusion from KooPMANS’ paper, therefore, seems to me to be that one ought to abandon the use of infinite horizons — not that one ought to abandon certain ethical notions. Now, of course, this may be wrong. It may turn out — and Prof. KooPMANS assures me that it does — that even with a finite horizon one has similar problems which are not so severe. In that case, it may not be worth dropping infinite horizons. Still, the role of this sort of analysis is surely to tell us how one can best achieve one’s ethical and social ends. In the course of analyzing that, it may turn out that such ends are unachievable. In such a case, one has to moderate one’s ends. The usual circumstance, however, is that one’s ends are not achievable in the sense of being contradictory whereas Prof. KooPMANS has shown that our ends may be unachie- vable in the sense that no solution to the problem exists — that the whole analysis breaks down if one insists on certain kinds of ethical goals. This sort of circumstance does not persuade me to give up my ethical goals, but rather to refine the mode of analysis. I can understand that the end result may be that I will have to give up certain goals as unachievable, but the demonstration of that ought i Koopmans - pag. 75

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