This work provides a rigorous treatment concerning the formation of rational expectations equilibria in a general class of spatial economic models under the effect of externalities, using techniques from calculus of variations and optimal control. Using detailed estimates for a parametric optimisation problem, the existence of rational expectations equilibria is proved via a fixed-point theorem, and they are characterised in terms of a nonlocal Euler-Lagrange equation. The study of the individual optimisation problem, formulated according to Ramsey's model, is performed via a convex relaxation to the space of BV capital paths and measure-valued consumptions, and allows to obtain existence, uniqueness, regularity and stability properties for the optimisers in a rigorous and original way.
Rational expectations equilibria in a Ramsey model of optimal growth with non-local spatial externalities / Santambrogio F.; Xepapadeas A.; Yannacopoulos A.N.. - In: JOURNAL DE MATHÉMATIQUES PURES ET APPLIQUÉES. - ISSN 0021-7824. - ELETTRONICO. - 140:(2020), pp. 259-279. [10.1016/j.matpur.2020.01.007]
Rational expectations equilibria in a Ramsey model of optimal growth with non-local spatial externalities
Xepapadeas A.Co-primo
;
2020
Abstract
This work provides a rigorous treatment concerning the formation of rational expectations equilibria in a general class of spatial economic models under the effect of externalities, using techniques from calculus of variations and optimal control. Using detailed estimates for a parametric optimisation problem, the existence of rational expectations equilibria is proved via a fixed-point theorem, and they are characterised in terms of a nonlocal Euler-Lagrange equation. The study of the individual optimisation problem, formulated according to Ramsey's model, is performed via a convex relaxation to the space of BV capital paths and measure-valued consumptions, and allows to obtain existence, uniqueness, regularity and stability properties for the optimisers in a rigorous and original way.File | Dimensione | Formato | |
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