The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Mar, 1974, Volume 42, Issue 2
https://doi.org/0012-9682(197403)42:2<273:HIASMO>2.0.CO;2-D
p. 273-278
Emmett Keeler
In long-run planning, targets may be set further in the future than economic technologies can be estimated. How costly in hindsight is limited foresight? Following Los, we say k is an @e-horizon if knowledge of economic possibilities for the next K time periods permits decisions with results at most @e worse than optimal. For a dynamic Leontief model, we show that any T-period efficient path is almost as big as all feasible T-period paths during the first T - K periods. Thus, given K periods notice, we can plan an @e-optimal growth path no matter how technologies change after T.
