On the optimal timing of regime switching in optimal growth models : a sobolev space approach

Abstract

In this thesis, we derive the necessary conditions of optimality of regime switching in optimal growth models, and extend the already established results in the literature to cover the multi-stage infinite horizon models depending explicitly to the switching instant. To this end, we utilize standard techniques from calculus of variations, and some basic properties of Sobolev spaces. We compare our results with previously established ones. In an application, we analyze the determinants of timing of technological adoption, under linearly expanding technological frontier.