Spatial dynamics and convergence: the spatial AK model
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.
|Date of creation:||Mar 2010|
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- 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
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- Raouf Boucekkine & C. Camacho & B. Zou, 2007. "Bridging the gap between growth theory and the new economic geography: The spatial Ramsey model," Working Papers 2007_27, Business School - Economics, University of Glasgow.
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