Accession Number : AD0670616
Title : SUFFICIENT CONDITIONS FOR OPTIMALITY IN AN INFINITE HORIZON DEVELOPMENT PLAN.
Descriptive Note : Technical rept.,
Corporate Author : STANFORD UNIV CALIF OPERATIONS RESEARCH HOUSE
Personal Author(s) : Manne,Alan S.
Report Date : MAY 1968
Pagination or Media Count : 39
Abstract : The paper begins by formulating a finite horizon linear programming model for economic development. This formulation allows for heterogeneous capital goods and for nonnegativity constraints upon investment in each sector. It is then proved that a certain set of conditions are sufficient to ensure that an optimal solution to this T period, finite horizon plan will also coincide with an optimal solution during the first T periods of an infinite horizon plan. Among the restrictive conditions imposed to prove this sufficiency theorem are the following: gradualist consumption paths, no primary factors that cannot themselves be produced within the economy, a Leontief technology, and a characterization of the optimal finite horizon solution as one in which the terminal investment and output levels are positive. An illustrative numerical example is provided. (Author)
Descriptors : (*MANAGEMENT PLANNING AND CONTROL, OPTIMIZATION), (*ECONOMICS, MANAGEMENT PLANNING AND CONTROL), PLANNING, LINEAR PROGRAMMING, MATHEMATICAL MODELS, PROBLEM SOLVING, THEOREMS
Subject Categories : Administration and Management
Economics and Cost Analysis
Distribution Statement : APPROVED FOR PUBLIC RELEASE