Problems of optimal economic investments with finite lifetime capital

  • Bernardo Nicoletti
  • Luigi Mariani
Economic Models
Part of the Lecture Notes in Computer Science book series (LNCS, volume 4)


The optimum economic dynamic investments problem has been investigated in the case of finite lifetime investments. The problem is reformulated in such a way that, by using mathematical programming, it is possible to derive general canonical optimum necessary conditions. From these, a computer algorithm can be derived. For linear systems with convex performance index and concave constraints, the conditions found are both necessary and sufficient and may be posed in the form of a discrete maximum principle.

As examples of application, a macroeconomic growth model and a microeconomic plant investment model are considered.


Planning Horizon Canonical Equation Finite Duration Nonlinear Difference Equation Finite Lifetime 
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Copyright information

© Springer-Verlag Berlin Heidelberg 1973

Authors and Affiliations

  • Bernardo Nicoletti
    • 1
  • Luigi Mariani
    • 2
  1. 1.Istituto ElettrotecnicoUniversità di NapoliNapoliItaly
  2. 2.Istituto di Elettrotecnica e ElettronicaUniversità di PadovaPadovaItaly

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