A Note on Capital Accumulation in a Two Sector General Equilibrium Model with Transfer

Busato, Francesco

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A Note on Capital Accumulation in a Two Sector General Equilibrium Model with Transfer

5 Pages Posted: 31 Mar 2003

See all articles by Francesco Busato

Francesco Busato

Aarhus University - School of Business and Social Sciences

Date Written: June 2002

Abstract

In this paper we show that in a two sector dynamic general equilibrium (DGE)model where part of produced capital is used as a production input in the originating sector, while remaining part is costly transferred to the other sector the optimal policies for consumption and investment are constant functions equal to zero.

Keywords: Multisector Accumulation Models, Value Function

Suggested Citation: Suggested Citation

Busato, Francesco, A Note on Capital Accumulation in a Two Sector General Equilibrium Model with Transfer (June 2002). Available at SSRN: https://ssrn.com/abstract=315080