An Entrepreneur’s Problem Under Perfect Foresight
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چکیده
An Entrepreneur’s Problem Under Perfect Foresight Consider a firm characterized by the following: kt Firm’s capital stock at the beginning of period t f(k) The firm’s total output depends only on k it Investment in period t j(i, k) AdJustment costs associated with investment i given capital k ξt = it + jt eXpenditures (purchases plus adjustment costs) on investment β = 1/R Discount factor for future profits (inverse of interest factor) Suppose that the firm’s goal is to pick the sequence it that solves:
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