Sensitivity analysis of optimal growth plans with exogenous capital stocks (Q1115335)

This paper provides additional results on the comparative properties of optimal growth plans with respect to the variations in exogenous capital stocks. The generalization to earlier literature is in the assumption that exogenous capital stocks exist in all periods, and not only in the beginning and end of the horizon. Increases in exogenous capital lead to increases in consumption, while investment into endogenous capital decreases in periods before the change and increases after the change. A redistribution increasing exogenous capital in one period, with equal reductions in other periods, has the same qualitative effect. Some other redistributions of more complicated variety are also analyzed.