Global stability and the "turnpike" in optimal unbounded growth models

This study proves various global stability results for unbounded optimal growth models. The main theorem states that any optimal path will eventually be in the neighborhood of a balanced growth path if future utility is sufficiently weakly discounted. The assumptions allow for non-smooth technologies, joint production, and production in independent sectors. Hence, the results form the integration of new growth and turnpike theory sought by McKenzie (1998) [31] in his Ely lecture. The applicability of the results is exemplified by means of a number of cases from growth theory and other areas of economics. (C) 2010 Elsevier Inc. All rights reserved.