Condition of balanced economic growth beyond the planning horizon (Q1093508)

The behavior of an economic system over a finite planning period should be consistent with its required post-planning growth. As a technique to ensure this consistency, we augment the optimization problems based on dynamic multiindustry models with a condition of balanced post-planning growth, i.e., indefinitely long economic growth with full utilization of capacity and full employment. This condition takes the form of a lower bound on the production capacities at the right end of the planning period. The properties of balanced paths observed in this case support the usefulness of the suggested modification of the optimization problem.