Optimal processes in a parametric optimal economic growth model (Q2663369): Difference between revisions

The paper is devoted to the optimal control problem \[ \text{Minimize }\: x_2(t):=-\int_{t_0}^t (1-s(\tau))^{\beta}x_1^{\alpha \beta}(\tau)e^{-\lambda \tau}d\tau \] over \(x=(x_1,x_2)\in W^{1,1}([t_0,T];R^2)\) and measurable functions \(s:[t_0,T]\to R\) satisfying \[ \begin{array}{l} x'_1(t)=Ax_1^{\alpha}(t)s(t)-\sigma x_1(t)\\ x'_2(t)=-(1-s(t))^{\beta}x_1^{\alpha \beta}(t)e^{-\lambda t}\\ (x(t_0),x(T))\in \{(x_0,0)\}\times R^2 \\ s(t)\in [0,1]\\ x_1(t)\ge 0. \end{array} \] A parametric finite horizon optimal economic growth problem is solved by using the maximum principle for optimal control problems with some constraints. It is shown that if the total factor productivity is relatively small, then the expansion of the production facility does not lead to a higher total consumption satisfaction of the society.