Modelling vintage structures with DDEs : principles and applications

Bouccekine, Raouf;De la Croix, David;Licandro-Goldaracena, Omar
(2004)

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Authors
  • Bouccekine, RaoufUCLouvain
    Author
  • De la Croix, DavidUCLouvain
    Author
  • Licandro-Goldaracena, OmarUCLouvain
    Author
Abstract
A comprehensive study of the linkages between demographic and economic variables should not only account for vintage specificity but also incorporate the relevant economic and demographic decisions in a complete optimal control set-up. In this paper, a methodological set-up allowing to reach these objectives is described. In this framework, time is continuous but agents take discrete timing decisions. The mixture of continuous and discrete time yields differential-difference equations (DDEs). This paper shows clearly that the approach allows for a relatively complete and rigorous analytical exploration in some special cases (mainly linear or quasi linear models), and for an easy computational appraisal in the general case.
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Bouccekine, R., De la Croix, D., & Licandro-Goldaracena, O. (2004). Modelling vintage structures with DDEs : principles and applications (ECON Working Papers 2004/04). https://hdl.handle.net/2078.5/130162