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Spatial dynamics and convergence: the spatial AK model

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Author Info

  • Raouf BOUCEKKINE

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics and Core, Univerity of Glasgow, Department of Economics)

  • Carmen CAMACHO

    ()
    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and FNRS)

  • Giorgio FABBRI

    ()
    (Dipartimento di Studi Economici S.Vinci, Universita di Napoli Parthenope,Naples and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

We study the optimal dynamics of an AK economy where population is uniformly distributed along the unit circle. Locations only differ in initial capital endowments. Despite constant returns to capital, we prove that transition dynamics will set in. In particular, we prove that the spatio-temporal dynamics, induced by the willingness of the planner to give the same (detrended) consumption over space and time, lead to convergence in the level of capital across locations in the long-run.

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Bibliographic Info

Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2010009.

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Length: 21
Date of creation: 16 Mar 2010
Date of revision:
Handle: RePEc:ctl:louvir:2010009

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Keywords: Economic Growth; Inequality; Spatial Dynamics; Convergence;

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References

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  1. Raouf Boucekkine & Carmen Camacho & Benteng Zou, 2006. "Bridging the gap between growth theory and the new economic geography: The spatial Ramsey model," DEGIT Conference Papers c011_039, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Klaus Desmet & Esteban Rossi-Hansberg, 2009. "On Spatial dynamics," Working Papers 2009-16, Instituto Madrileño de Estudios Avanzados (IMDEA) Ciencias Sociales.
  3. Silvia Faggian, 2008. "Maximum Principle for Boundary Control Problems Arising in Optimal Investment with Vintage Capital," Working Papers 181, Department of Applied Mathematics, Università Ca' Foscari Venezia.
  4. Fabbri, Giorgio & Gozzi, Fausto, 2008. "Solving optimal growth models with vintage capital: The dynamic programming approach," Journal of Economic Theory, Elsevier, vol. 143(1), pages 331-373, November.
  5. Paulo Brito, 2004. "The Dynamics of Growth and Distribution in a Spatially Heterogeneous World," Working Papers Department of Economics 2004/14, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  6. Brock, William & Xepapadeas, Anastasios, 2008. "General Pattern Formation in Recursive Dynamical Systems Models in Economics," MPRA Paper 12305, University Library of Munich, Germany.
  7. Chatterjee, Satyajit, 1994. "Transitional dynamics and the distribution of wealth in a neoclassical growth model," Journal of Public Economics, Elsevier, vol. 54(1), pages 97-119, May.
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Cited by:
  1. William A. Brock & Anastasios Xepapadeas & Athanasios N. Yannacopoulos, 2012. "Optimal Agglomerations in Dynamic Economics," Working Papers 2012.64, Fondazione Eni Enrico Mattei.
  2. William Brock & Anastasios Xepapadeas & Athanasios Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," DEOS Working Papers 1402, Athens University of Economics and Business.
  3. Brock, William A. & Xepapadeas, Anastasios & Yannacopoulos, Athanasios N., 2014. "Spatial externalities and agglomeration in a competitive industry," Journal of Economic Dynamics and Control, Elsevier, vol. 42(C), pages 143-174.
  4. Carmen Camacho & Agustín Pérez-Barahona, 2012. "Land use dynamics and the environment," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00674020, HAL.
  5. repec:hal:cesptp:halshs-00831042 is not listed on IDEAS
  6. Raouf Boucekkine & Carmen Camacho & Giorgio Fabbri, 2013. "On the Optimal Control of Some Parabolic Partial Differential Equations Arising in Economics," AMSE Working Papers 1334, Aix-Marseille School of Economics, Marseille, France, revised 05 Jun 2013.
  7. repec:hal:journl:halshs-00674020 is not listed on IDEAS
  8. Gani Aldashev & Serik Aldashev & Timoteo Carletti, 2014. "On Convergence in the Spatial AK Growth Models," Papers 1401.4887, arXiv.org.
  9. Paulo Brito, 2012. "Global Endogenous Growth and Distributional Dynamics," DEGIT Conference Papers c017_053, DEGIT, Dynamics, Economic Growth, and International Trade.
  10. BOUCEKKINE, Raouf & FABBRI, Giorgio & PINTUS, Patrick, . "On the optimal control of a linear neutral differential equation arising in economics," CORE Discussion Papers RP -2449, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  11. repec:hal:wpaper:halshs-00831042 is not listed on IDEAS

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