Spatial rational expectations equilibria in the Ramsey model of optimal growth
Filippo Santambrogio (LMO), A Xepapadeas, A Yannacopoulos
TL;DR
This paper rigorously establishes the existence and characterization of spatial rational expectations equilibria in a class of spatial economic models with externalities, using calculus of variations techniques.
Contribution
It introduces a novel mathematical framework for analyzing spatial rational expectations equilibria in economic models with externalities, employing calculus of variations.
Findings
Existence of spatial rational expectations equilibria proved.
Characterization via a nonlocal Euler-Lagrange equation.
Provides detailed estimates for a parametric optimization problem.
Abstract
It is the aim of this work provide a rigorous treatment concerning the formation of spatial rational expectations equlibria in a general class of spatial economic models under the effect of externalities, using techniques from the calculus of variations. Using detailed estimates for a para-metric optimisation problem, the existence of spatial rational expectations equilibria is proved and they are characterised in terms of a nonlocal Euler-Lagrange equation.
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Taxonomy
TopicsEconomic theories and models · Regional Economics and Spatial Analysis · Economic Growth and Productivity