SENSITIVITY ANALYSIS OF MULTISECTOR OPTIMAL ECONOMIC-DYNAMICS

This paper develops several comparative dynamics results for Ramsey-ty pe multidimensional dynamic optimization problems in economics. We pro vide sufficient conditions for the value function to be monotone and s upermodular, and for the extremal optimal policies to be monotone in t he state and in other parameters. These results are natural extensions of the one-dimensional case when the varying parameters are endogenou s (state variables), but are rather restrictive for exogenous paramete rs (discount rate and length of horizon). The analysis relies mostly o n the fundamental results in lattice programming.