Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Jan, 1963, Volume 31, Issue 1

Efficient Accumulation of Capital for the Firm<131:EAOCFT>2.0.CO;2-9
p. 131-150

Edward Zabel

In this study dynamic programming is applied to the problem of efficient accumulation of capital for the firm. Considering a firm which has both a production decision and a capital decision each period, a variety of conditions are stated which yield the optimality of (S, s) or constant stock capital policies. Other conditions are given which require more complex capital policies, and a numerical example of a complex policy is presented as well.

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