Optimal growth problem in the baseline schumpeterian model

Reference no: EM131139712

(a) Verify that Theorem 7.14 from Chapter 7 can be applied to the optimal growth problem in the baseline Schumpeterian model of Section 14.1.

(b) Show that the solution to this problem is unique. [Hint: recall Exercise 8.11 in Chapter 8.]

Exercise 8.11

Use an argument similar to that of the proof of Mangasarian's sufficiency result (Theorem 7.5) to show that because the representative household's Hamiltonian in the neoclassical growth model, H (t, a, c, μ), is concave in (a, c) and strictly concave in

c, the path of consumption and assets given by (8.17)-(8.19) is the unique solution to the household's maximization problem.

Reference no: EM131139712

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