@article{Pant:332649,
      recid = {332649},
      author = {Pant, Hom},
      title = {A generic approach to investment allocation in recursively  dynamic CGE models},
      address = {2015},
      year = {2015},
      note = {Presented at the 18th Annual Conference on Global Economic  Analysis, Melbourne, Australia},
      abstract = {It is a common practice in recursively dynamic CGE models  to maintain static expectations. Consequently, investors  take current rates of return as expected future rates of  return. The vexing problem with this approach is that no  matter how we allocate investments across sectors and  regions in the current period, it is not possible to bring  the expected rates of return to equality once the  equilibrium is displaced. To deal with this problem all  recursively dynamic CGE models have resorted to some  complex mechanisms to allocate investments across sectors  and regions.  By drawing on the inverse relationship  between the future capital stock and its marginal  productivity, this paper establishes an inverse  relationship between the expected future rates of return  and current investment levels and this approach has been  applied to the static GTAP model (version 6.2). By doing so  this paper provides an alternative to the GTAP-Dyn model.},
      url = {http://ageconsearch.umn.edu/record/332649},
}