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:: Croissance optimales dans un modele macroeconomique / E. Malinvaud, Institut National de la Statistique et des Etudes Economiques Paris - France

Collection:: Economics Books

306 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - oR cause it gives a higher value for C, at all times. However, if the total period considered were restricted to a horizon T as shown in the diagram, programs 1, 2 and 3 would appear as optimal, each one with respect to an appropriate terminal con- dition on Ki. If the social interest rate €, used in the definition of the utility function, is positive, then condition 1 is satisfied by the regular program @” that gives the highest value to Co. This program #7 is therefore optimal. Its optimality may still be proved directly for the case e =0. But, when the social rate of interest € is negative, no program is optimal. For instance, program #2 is preferred to the program #! exhibited on the diagram. However a better program can be found as follows when e<o : up to time T, select a regular program close to # but allowing a little higher value of K,, and therefore a little smaller value of C,; at time T take an extra consumption by reducing Kr to its value in #2, there- after continue with program #. The program thus defined is not optimal either, because one would prefer to postpone ever farther in the future the time T at which one switches back to 4? In section 5, I consider the case in which the production function would simply imply a fixed capital-output ratio. The determination of regular programs then boils down to the so- lution of a recurrence equation on c,. Choosing a type of utility function proposed by R. Frise and more recently used by J. TINBERGEN, I find that an optimal program exists only when the social rate of interest ¢ exceeds a positive minimum that may be of some 10% per annum. This suggests that, in the programming of future development, one can hardly avoid taking into account the decrease in the marginal productivity of capital, unless one discount heavily against the future. 5] Malinvaud - pag. 6

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