Optimal Economic Growth Through Capital Accumulation in a Spatially Heterogeneous Environment

Raouf Boucekkine (), Giorgio Fabbri and Salvatore Federico ()

No 1641, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: We design a general set-up for the study of a generic economy whose development process is entirely driven by the spatio-temporal dynamics of capital accumulation. It allows to take into account spatial heterogeneities in technological level and population distribution. We solve analytically, via dynamic programming in infinite dimensions, the optimal control problem associated to the model, finding explicitly the optimal feedback and the value function. The expression of the optimal dynamics of the system in terms of eigenfunctions of an appropriate Sturm-Liouville problem allows to simulate the behavior of the variables and, in particular, their optimal discounted long-run spatial distribution.

Keywords: Dynamical spatial model; growth; agglomeration; infinite dimensional optimal control problems; Sturm-Liouville theory (search for similar items in EconPapers)
JEL-codes: C61 O4 R1 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2016-11
New Economics Papers: this item is included in nep-geo and nep-gro
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1641

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