The minimal-time growth problem and turnpike effect in the stationary Gale economy
Keywords:stationary Gale economy, minimum-time growth problem, von Neumann equilibrium, production turnpike—von Neumann ray
AbstractIn mathematical economics there is a number of so called “turnpike theorems” proved mainly on the basis of multiproduct models of economic dynamics. According to these theorems, all optimal paths of economic growth over a long period of time converge to a certain path (turnpike) in which the economy achieves the highest growth rate while remaining in a specific dynamic (von Neumann) equilibrium. The article refers to this trend and presents some properties of optimal growth processes in the Gale-type model of the stationary economy when the quality criterion of growth processes is not the utility of production—which is normally postulated in the turnpike theory—but the time needed by the economy to achieve the desired final state, e.g. the level of production or production value. According to the author’s knowledge, the idea of using time as a criterion for growth in turnpike theory (especially in Gale-type economy) is innovative. It has been proven that changing the growth criterion does not deprive the Gale economy of its asymptotic / turnpike properties.
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