Rational expectations equilibria in a Ramsey model of optimal growth with non-local spatial externalities

DOI10.1016/J.MATPUR.2020.01.007MaRDI QIDQ781649zbMATH OpenOpenAlexFDO

Authors Filippo Santambrogio, Anastasios Xepapadeas, Athanasios Yannacopoulos

Publication date 17 July 2020

Published in Journal de Mathématiques Pures et Appliquées. Neuvième Série (Search for Journal in Brave)

Full work available at URL https://doi.org/10.1016/j.matpur.2020.01.007

zbMATH Keywords

\(\Gamma\)-convergenceKakutani's fixed pointmeasure and BV spacesoptimal control

Mathematics Subject Classification ID

Methods involving semicontinuity and convergence; relaxation (49J45) Economic growth models (91B62) Spatial models in economics (91B72)

Review text

This article is a contribution to the important topic -- infinite horizon spatial optimal growth models under the influence of external factors. In these models a natural research question is the existence of a rational-expectations-equilibrium (REE). The author's research is related to the formation of REE in a general class of spatial economic models under the effect of externalities. Using precise estimates for a parametric optimisation problem, formulated according to Ramsey's model the existence of REE is proved via a basic theorem from the area of fixed point theory. The reader can find a detailed discussion on important issues related to the existence of rational expectations equilibria and their characterisation in terms of the Euler-Lagrange equation, sustainability and stability of the solution with the proposed model (see Section 5).

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Cites work

• Agglomeration as Local Instability of Spatially Uniform Steady-States
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• An introduction to -convergence
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• Optimal consumption models in economic growth
• Optimal consumption of the finite time horizon Ramsey problem
• Optimal control in infinite horizon problems: A Sobolev space approach
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• Spatial dynamics and convergence: the spatial AK model
• Variational Analysis in Sobolev and BV Spaces

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