The Dynamics of Growth and Distribution in a Spatially Heterogeneous World
AbstractThis paper tries to reconcile growth and geographical economics by dealing directly with capital accumulation through time and space and by seeing growth convergence and spatial agglomeration as jointly generated by dynamic processes displaying pattern formation. It presents a centralized economy in which a Bergson-Samuelson- Millian central planner finds a flow of optimal distributions of consumption, subject to a spatial-temporal capital accumulation budget constraint. The main conclusions are: first, if the behavioral parameters are symmetric, but there is an asymmetric distribution of the capital stock, then the long run asymptotic distribution will be spatially homogeneous; second, if there is homogeneous distribution of the capital stock, but there is an asymmetric shock in any parameter, then the economy will converge towards a spatially heterogeneous asymptotic state; third, spatially heterogeneous asymptotic states will only emerge exogenously, not endogenously; fourth, the spatial propagation mechanism can give birth, when the production function is close to linear, to a Turing instability, which implies that for some parameter values, a conditionally stable spacetime distribution should display spatial pattern formation.
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Bibliographic InfoPaper provided by Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon. in its series Working Papers with number 2004/14.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: Department of Economics, School of Economics and Management (ISEG), Technical University of Lisbon, Rua do Quelhas 6, 1200-781 LISBON, PORTUGAL
Web page: https://aquila.iseg.utl.pt/aquila/departamentos/EC
Optimal growth and distribution; Spatial growth; Optimal control of partial differential equations; Traveling waves; Fourier transforms; Turing instability.;
Find related papers by JEL classification:
- C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
- D9 - Microeconomics - - Intertemporal Choice and Growth
- E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
- R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-05-07 (All new papers)
- NEP-GEO-2005-05-07 (Economic Geography)
- NEP-MAC-2005-05-07 (Macroeconomics)
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