Article
Optimal Investment in Heterogeneous Capital and Technology Under Restricted Natural Resource
Mathematics Faculty Publications
Document Type
Article
Publication Date
10-1-2014
Abstract
We consider the optimal control of nonlinear integral equations with endogenous delay and state constraints, which describe a developing economy subjected to resource constraints. The economy invests in new resource-efficient technologies, invests in new capital, and scraps obsolete capital. We derive the optimality condition and determine long-term asymptotically exponential trajectories that optimally combine scrapping the dirtiest capital and developing new clean technologies. Next, we study the short-term dynamics of the model and show that it leads to a sustainable growth with active resource constraint.
Citation Information
Raouf Boucekkine, Natali Hritonenko and Yuri Yatsenko. "Optimal Investment in Heterogeneous Capital and Technology Under Restricted Natural Resource" (2014) Available at: http://works.bepress.com/natali-hritonenko/43/