Econometrica: Jan 1963, Volume 31, Issue 1
Efficient Accumulation of Capital for the Firm
Edward ZabelIn 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.
Log In To View Full Content