Control of one-sector economy under restrictions on saving and consumption

A problem of optimal control of one-sector economy in the short run under restrictions on saving and consumption taking into account industrial expenses and tax deductions has been investigated on a class of linearly-homogeneous production functions. The basic result is formulated in the form of Turnpike Theorem. The Golden Rule of Saving, defining how economic product is distributed on a turnpike is derived. The results are specified for the case of Cobb–Douglas production function.