Intertemporal Complementarity and Optimality: A Study of a Two-Dimensional Dynamical System

  • Tapan MitraEmail author
  • Kazuo Nishimura


The theory of optimal intertemporal allocation has been developed primarily for the case in which the objective function of the planner or representative agent can be written as \(U(c1, c2\ldots) \equiv {{{\sum}^\infty}_{t=1}} {{\delta}^{t-1}}w(c_{t})\) where c t represents consumption at date t, w the period felicity function, and \(\delta\,\,\epsilon\) (o,1) a discount factor, representing the time preference of the agent.


Utility Function Euler Equation Discount Factor Characteristic Root Optimal Program 
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© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  1. 1.Department of EconomicsCornell UniversityIthacaUSA
  2. 2.Institute of Economic ResearchKyoto UniversityKyotoJapan

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