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Growth and Agglomeration in the Heterogeneous Space: A Generalized AK Approach

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

No 2017006, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Abstract. We provide with an optimal growth spatio-temporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. We choose the simplest production function generating growth endogenously, the AK technology but in sharp contrast to the related literature which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology (through the productivity parameter A) and population. Beside the mathematical tour de force, we ultimately show that agglomeration may show up in our optimal growth with linear technology, its exact shape depending on the interaction of two main effects, a population dilution effect versus a technology space discrepancy effect.

Keywords: Growth; agglomeration; heterogeneous and continuous space; capital mobility; infinite dimensional optimal control problems (search for similar items in EconPapers)
JEL-codes: R1 O4 C61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-gro and nep-ure
Date: 2017-03-28
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Related works:
Working Paper: Growth and Agglomeration in the Heterogeneous Space: A Generalized AK Approach (2019)
Working Paper: Growth and agglomeration in the heterogeneous space: A generalized AK approach (2018) Downloads
Working Paper: Growth and agglomeration in the heterogeneous space: A generalized AK approach (2018) Downloads
Working Paper: Growth and Agglomeration in the Heterogeneous Space: A Generalized AK Approach (2017) Downloads
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