Raouf Boucekkine
[Aix-Marseille University (IMéRA and AMSE), CNRS, EHESS and Ecole Centrale de Marseille]
Giorgio Fabbri
[Univ. Grenoble Alpes, CNRS, INRA]
Salvatore Federico
[Universita degli Studi di Siena, Dipartimento di Economia Politica e Statistica]
Fausto Gozzi
[Dipartimento di Economia e Finanza, LUISS Guido Carli]
Leblanc, Virginie
[UCL]
We construct a spatiotemporal frame for the study of optimal growth under transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be spaceindependent. This provides a comprehensive setting to analyze pollution diffusion with a close account of geographic heterogeneity. The involved optimization problem is infinite-dimensional. We propose an alternative method for an analytical characterization of the optimal paths and the asymptotic spatial distributions. The method builds on a deep economic concept of pollution spatiotemporal welfare effect, which makes it definitely useful for economic analysis.
Bibliographic reference |
Raouf Boucekkine ; Giorgio Fabbri ; Salvatore Federico ; Fausto Gozzi ; Leblanc, Virginie. A Spatiotemporal Framework For The Analytical Study Of Optimal Growth Under Transboundary Pollution. IRES Discussion papers ; 2019016 (2019) 27 pages |
Permanent URL |
http://hdl.handle.net/2078.1/220756 |