Abstract
Studies of optimal growth in a multisector framework are generally addressed in reduced form models, defined by an indirect utility function which summarizes the consumer's preferences and the technologies. Strong concavity assumptions allow to obtain some results about differentiability of optimal solutions and stability of steady states. However there does not exist any information about the conditions that have to be placed on the fundamentals to obtain such a property. This paper shows that if the consumption good production function isα-concave and if the capital goods technologies are Lipschitz-continuous then the indirect utility function is strongly concave.Journal of Economic LiteratureClassification Numbers: C61, O41.
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