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On Convergence in the Spatial AK Growth Models

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  • Gani Aldashev
  • Serik Aldashev
  • Timoteo Carletti

Abstract

Recent research in economic theory attempts to study optimal economic growth and spatial location of economic activity in a unified framework. So far, the key result of this literature - asymptotic convergence, even in the absence of decreasing returns to capital - relies on specific assumptions about the objective of the social planner. We show that this result does not depend on such restrictive assumptions and obtains for a broader class of objective functions. We also generalize this finding, allowing for the time-varying technology parameter, and provide an explicit solution for the dynamics of spatial distribution of the capital stock.

Suggested Citation

  • Gani Aldashev & Serik Aldashev & Timoteo Carletti, 2014. "On Convergence in the Spatial AK Growth Models," Papers 1401.4887, arXiv.org.
  • Handle: RePEc:arx:papers:1401.4887
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    3. Danny Quah, 2002. "Spatial Agglomeration Dynamics," American Economic Review, American Economic Association, vol. 92(2), pages 247-252, May.
    4. Boucekkine, Raouf & Camacho, Carmen & Zou, Benteng, 2009. "Bridging The Gap Between Growth Theory And The New Economic Geography: The Spatial Ramsey Model," Macroeconomic Dynamics, Cambridge University Press, vol. 13(01), pages 20-45, February.
    5. Boucekkine, R. & Camacho, C. & Fabbri, G., 2013. "Spatial dynamics and convergence: The spatial AK model," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2719-2736.
    6. Comin, Diego & Dmitriev, Mikhail & Rossi-Hansberg, Esteban, 2012. "The Spatial Diffusion of Technology," CEPR Discussion Papers 9208, C.E.P.R. Discussion Papers.
    7. Paul Krugman, 1997. "Development, Geography, and Economic Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 026261135x, January.
    8. Klaus Desmet & Esteban Rossi-Hansberg, 2010. "On Spatial Dynamics," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 43-63.
    9. Klaus Desmet & Esteban Rossi-Hansberg, 2012. "Innovation in Space," American Economic Review, American Economic Association, vol. 102(3), pages 447-452, May.
    10. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    11. Paulo Brito, 2004. "The Dynamics of Growth and Distribution in a Spatially Heterogeneous World," Working Papers Department of Economics 2004/14, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    12. Desmet, Klaus & Rossi-Hansberg, Esteban, 2009. "Spatial growth and industry age," Journal of Economic Theory, Elsevier, vol. 144(6), pages 2477-2502, November.
    13. Daron Acemoglu & Melissa Dell, 2010. "Productivity Differences between and within Countries," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 169-188, January.
    14. Danny Quah, 2002. "Spatial Agglomeration Dynamics," CEP Discussion Papers dp0521, Centre for Economic Performance, LSE.
    15. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Giorgio Fabbri, 2015. "Ecological barriers and convergence: a note on geometry in spatial growth models," Working Papers hal-01159253, HAL.
    2. Giorgio Fabbri, 2014. "Ecological Barriers and Convergence: A Note on Geometry in Spatial Growth Models," Documents de recherche 14-05, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.

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