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Title:On the Transition from Instantaneous to Time-Lagged Capital Accumilation: The Case of Leontief Type Production Functions PDF Logo
Authors:Winkler, Ralph
Brandt-Pollmann, Ulrich
Moslener, Ulf
Schlöder, Johannes
Issue Date:2005
Series/Report no.:ZEW Discussion Papers 05-30
Abstract:We formulate an optimal control capital accumulation model with a Leontief-type production function and an exogenously given time-lag between investment and the accumulation of the capital stock, to analyze the qualitative and quantitative influence of time-lags on the system dynamics. As known from the time-to-build literature, optimal investment paths for positive and finite time-lags are in general cyclical, in contrast to the monotonic optimal paths for instantaneous capital accumulation. We show that the transition between instantaneous and time-lagged capital accumulation is continuous, in the sense that the greater is the time-lag between investment and capital accumulation, the more likely and more pronounced becomes cyclical behavior of the optimal paths.
Subjects:cyclical optimal paths
numerical optimization
time-lagged optimal control
time-to-build
JEL:E32
C61
C63
Document Type:Working Paper
Appears in Collections:ZEW Discussion Papers
Publikationen von Forscherinnen und Forschern des ZEW

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