Optimal Accumulation in a Small Open Economy with Technological Uncertainty

ASU Working Paper 97/9

19 Pages Posted: 2 Mar 1998

See all articles by Manjira Datta

Manjira Datta

Arizona State University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: August 1997

Abstract

This paper analyzes the optimal allocation problem of a small country facing an uncertain technology and trading. It is involved in production of many commodities. Differentiability cannot be guaranteed, hence, the Ramsey-Euler condition of optimality needs to be modified. From the optimality criterion, we derive a pair of conditions, which does not require differentiability. If "enough" uncertainty is allowed, the sequence of the distribution functions of investment expenditure converges uniformly to a unique invariant measure.

JEL Classification: C61, D90, O41

Suggested Citation

Datta, Manjira, Optimal Accumulation in a Small Open Economy with Technological Uncertainty (August 1997). ASU Working Paper 97/9, Available at SSRN: https://ssrn.com/abstract=63636 or http://dx.doi.org/10.2139/ssrn.63636

Manjira Datta (Contact Author)

Arizona State University - Department of Economics ( email )

W.P. Carey School of Business
Arizona State University, Box 873806
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United States
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