Capital vs education: Assessment of economic growth from two perspectives (Abstract)

Sanderson WC, Tarasyev AM, & Usova AA (2010). Capital vs education: Assessment of economic growth from two perspectives (Abstract). In: [[NOLCOS 2010]], 8th IFAC Symposium on Nonlinear Control Systems, 1-3 September 2010, University of Bologna, Italy

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Abstract

The paper is devoted to construction of optimal trajectories in the model which balances growth trends of investments in capital and labour efficiency. The model is constructed within the framework of classical approaches of the growth theory. It is based on three production factors: capital, educated labour and useful work. It is assumed that capital and educated labour are invested endogenously, and useful work is an exogenous flow. The level of GDP is described by an exponential production function of the Cobb-Douglas type. The utility function of the growth process is given by an integral consumption index discounted on the infinite horizon. The optimal control problem is posed to balance investments in capital and labour efficiency. The problem is solved on the basis of dynamic programming principles. Series of Hamiltonian systems are examined including analysis of steady states, properties of trajectories and their growth rates. A novelty of the solution consists in constructing nonlinear stabilizers based on the feedback principle which lead the system from any current position to an equilibrium steady state. Growth and decline trends of the model trajectories are studied for all components of the system and their proportions including: dynamics of GDP, consumption, capital, labour efficiency, investments in capital and labour efficiency.

Item Type: Other
Uncontrolled Keywords: Optimal control; Stabilization; Dynamical systems techniques
Research Programs: Dynamic Systems (DYN)
Bibliographic Reference: In: [[NOLCOS 2010]], 8th IFAC Symposium on Nonlinear Control Systems, 1-3 September 2010, University of Bologna, Italy
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:44
Last Modified: 17 Feb 2016 12:32
URI: http://pure.iiasa.ac.at/9391

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