On the dynamics of capital accumulation across space

Reference : On the dynamics of capital accumulation across space


	Document type :	Scientific journals : Article
	Discipline(s) :	Business & economic sciences : Quantitative methods in economics & management
	To cite this reference:	http://hdl.handle.net/10993/5157

Title :	On the dynamics of capital accumulation across space
Language :	English
Author, co-author :	Camacho, Carmen []
	Zou, Benteng [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
	Briani, Maya []
Publication date :	2008
Journal title :	European Journal of Operational Research
Publisher :	NORTH-HOLLAND
Volume :	186
Issue/season :	2
Pages :	451-465
Peer reviewed :	Yes (verified by ORBi^lu)
Audience :	International
ISSN :	0377-2217
Keywords :	[en] Economic geography ; Spatial Dynamics ; Parabolic Differential Equations ; Optimal Control
Abstract :	[en] We solve an optimal growth model in continuous space, continuous and bounded time. The optimizer chooses the optimal trajectories of capital and consumption across space and time by maximizing an objective function with both space and time discounting. We extract the corresponding Pontryagin conditions and prove their sufficiency. We end up with a system of two parabolic differential equations with the corresponding boundary conditions. We propose a simple numerical set-up to simulate PDE systems which we employ to study the roles of initial capital and technology distributions over space in various scenarios.
Permalink :	http://hdl.handle.net/10993/5157
DOI :	10.1016/j.ejor.2007.02.031

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