Abstract
This paper develops a general framework to analyze the comparative dynamic properties of optimal growth paths with respect to any parameter in a continuous time model of uncertainty. A distinguishing feature of the analysis is that the entire dynamic time path of the capital accumulation process can be characterized rather than restricting attention to a comparison of steady states as in conventional analysis. Since any policy variable enters as a parameter in a growth model, the paradigm developed immediately yields the dynamic impact of any policy tool on the time paths of the optimal capital accumulation program. The powerful Itô's Lemma of stochastic calculus then determines the impact of the policy parameter on other variables on interest such as the wage rate and the return to capital. © 1998 Elsevier Science B.V.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
