Solution to nonlinear MHDS arising from optimal growth problems

Ruiz Tamarit, Jose Ramon;Ventura-Marco, M.
(2011) Mathematical Social Sciences — Vol. 61, n° 2, p. 86-96 (2011)

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  • Ruiz Tamarit, Jose RamonUCLouvain
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  • Ventura-Marco, M.
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Abstract
In this paper we propose a method for solving in closed form a general class of nonlinear modified Hamiltonian dynamic systems (MHDS). This method is used to analyze the intertemporal optimization problem from endogenous growth theory, especially the cases with two controls and one state variable. We use the exact solutions to study both uniqueness and indeterminacy of the optimal path when the dynamic system has not a well-defined isolated steady state. With this approach we avoid the linearization process, as well as the reduction of dimension technique usually applied when the dynamic system offers a continuum of steady states or no steady state at all. © 2011 Elsevier B.V.
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Ruiz Tamarit, J. R., & Ventura-Marco, M. (2011). Solution to nonlinear MHDS arising from optimal growth problems. Mathematical Social Sciences, 61(2), 86-96. https://doi.org/10.1016/j.mathsocsci.2011.01.001 (Original work published 2011)