A Twisted Turnpike.

Emmett B. Keeler

Expert InsightsPublished 1970

In a closed linear model of production, a path of maximal balanced growth is called a Neumann ray; long, efficient paths of capital accumulation remain near a Neumann ray most of the time. This paper uses McKenzie's version of the Morishima nojoint-production turnpike theorem to determine how much of the theory can be retained if the production possibilities vary with time. If the set of production possibilities for each good is assumed to be compact and strictly convex, instead of finite, the theorem is strengthened. It is found that, if the transformation sets are weakly positive, the diameter of the set of prices associated with efficient paths approaches zero. If the isoquants are uniformly strictly convex, long, efficient paths are close to each other most of the time. With earlier turnpike models, convergence of efficient paths meant convergence to the turnpike. With the more general assumptions, this remains true, but the turnpike is difficult to compute. 16 pp. Ref.

Document Details

Citation

Chicago Manual of Style

Keeler, Emmett B., A Twisted Turnpike. Santa Monica, CA: RAND Corporation, 1970. https://www.rand.org/pubs/papers/P4493.html.
BibTeX RIS

This publication is part of the RAND paper series. The paper series was a product of RAND from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.