Optimal Investment in Heterogeneous Capital and Technology Under Restricted Natural Resource

Raouf Boucekkine (), Natali Hritonenko () and Yuri Yatsenko
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Natali Hritonenko: Prairie View A&M University

Journal of Optimization Theory and Applications, 2014, vol. 163, issue 1, No 14, 310-331

Abstract: Abstract We consider the optimal control of nonlinear integral equations with endogenous delay and state constraints, which describe a developing economy subjected to resource constraints. The economy invests in new resource-efficient technologies, invests in new capital, and scraps obsolete capital. We derive the optimality condition and determine long-term asymptotically exponential trajectories that optimally combine scrapping the dirtiest capital and developing new clean technologies. Next, we study the short-term dynamics of the model and show that it leads to a sustainable growth with active resource constraint.

Keywords: Optimal control; State constraints; Nonlinear integral equations; Age-structured populations; R&D investment (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (8)

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DOI: 10.1007/s10957-013-0453-y

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