Optimal and competitive programs in reachable multi sector models (Q1817963)

The problem under consideration is the condition ensuring optimality in the sense of discounted consumption welfare for competitive infinite horizon programs in multi-sector economic models. The authors use the general model as a triplet \((\Omega, w, \delta)\). Here \(\Omega\) is a subset of \(\mathbb{R}^n_+ \times \mathbb{R}^n_+\), welfare function \(w:\mathbb{R}^n_+\to \mathbb{R}\) and \(\delta\) stands for the discount factor. Elements of \(\Omega\) are ordered pairs \((x,y)\), where \(x\) stands for the initial stock of inputs and \(y\) stands for the final output. The triplet is subjected by rather common assumptions that are fulfilled for the main classes of models: Simple Leontief, General Linear and nonlinear ones that are described by production functions. A new variant of a reachability condition for the economic dynamic model is introduced. The essence of the property is: the technological production possibilities are such that, beginning with a capital stock from which expansion of stocks are feasible, it is possible to attain the stocks along any feasible program. The main result of the paper is the statement that under the reachability condition a competitive program from any state \(\widetilde y\in \mathbb{R}^n_+\) corresponding to some prices is an optimal one from \(\widetilde y\). Some examples with models mentioned above illustrate the assumptions and the main result.