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Optimal Agglomerations in Dynamic Economics

Author Info

  • Athanasios Yannacopoulos
  • Anastasios Xepapadeas
  • William Brock

Abstract

We study rational expectations equilibrium problems and social optimum problems in infinite horizon spatial economies in the context of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in infinite dimensional Hilbert spaces. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics.

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Paper provided by Athens University of Economics and Business in its series DEOS Working Papers with number 1217.

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Handle: RePEc:aue:wpaper:1217
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Keywords: Agglomeration; spatial spillovers; spillover induced instability; rational expectations equilibrium; social optimum; monotone operators.;

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Find related papers by JEL classification:
  • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
  • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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  2. Robert E. Lucas, Jr., 2001. "Externalities and Cities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 245-274, April.
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  19. 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.
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  25. Carmen, CAMACHO & Benteng, ZOU, 2003. "The Spatial Solow Model," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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Cited by:

  1. Brock, William A. & Engström, Gustav & Grass, Dieter & Xepapadeas, Anastasios, 2013. "Energy balance climate models and general equilibrium optimal mitigation policies," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2371-2396.
  2. William Brock & Anastasios Xepapadeas & Athanasios Yannacopoulos, . "Adjustment Costs and Long Run Spatial Agglomerations," DEOS Working Papers 1327, Athens University of Economics and Business.
  3. Anastasios Xepapadeas & Athanasios Yannacopoulos & Andreas Ioannidis, 2014. "Spatial Growth: The Distribution of Capital across Locations when Saving Rates are Exogenous," DEOS Working Papers 1412, Athens University of Economics and Business.

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