Abstract
Ryder (Ref. 1) has developed a simple two-sector macroeconomic model incorporatinglearning by doing as a determinant of the growth of productivity-enhancing experience and its effect on foreign trade. In this paper, optimal foreign trade and capital allocation policies are determined, in the context of the above model, for ranges of the international trade price not considered by Ryder. An extension of Ryder's model to include a dual trade price structure is briefly discussed. A specific numerical example is used to ascertain the configuration of the various features occurring in the extremal fields at different price levels.
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References
Ryder, H.,Optimal Accumulation in a Listian Model, Mathematical Systems Theory and Economics, II, Edited by H. W. Kuhn and G. P. Szegö, Springer-Verlag, Berlin, Germany, 1969.
Luke, D. W.,Optimal Economic Growth with Foreign Trade and a Learning Industry, Stanford University, PhD Thesis, 1977.
Arrow, K., andKurz, M.,Public Investment, The Rate of Return and Optimal Fiscal Policy, Johns Hopkins Press, Baltimore, Maryland, 1970.
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McDanell, J. P., andPowers, W. F.,Necessary Conditions for Joining Optimal Singular and Nonsingular Subarcs, SIAM Journal on Control, Vol. 9, No. 2, 1971.
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Luke, D.W., Breakwell, J.V. Optimal economic growth with foreign trade and a learning industry. J Optim Theory Appl 24, 607–616 (1978). https://doi.org/10.1007/BF00935302
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DOI: https://doi.org/10.1007/BF00935302