Turnpike Theorems in Nonconvex Nonstationary Environments

Abstract

This paper provides a comprehensive development of turnpike theory in a stochastic aggregative model with time-varying nonconvex technology. A new approach to turnpike theorems is developed that exploits the monotonicity of optimal programs and utilizes a supermartingale process generated by stochastic Euler equations. This extends the classical turnpike theory to general nonconvex, nonstationary environments. Copyright 1997 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.