TITLE:
Asymptotic Behaviors Analysis of the Spatial AK Model with Trade Costs
AUTHORS:
Hanlei Hu
KEYWORDS:
Spatial AK Model, Trade Costs, Asymptotic Behaviors
JOURNAL NAME:
Theoretical Economics Letters,
Vol.11 No.3,
June
29,
2021
ABSTRACT: We consider a spatial economic growth model with
trade costs whose spatial-temporal dynamics of the capital stock are governed
by a parabolic partial differential equation and analyze the effects of the
trade costs on the asymptotic behaviors of the capital in the framework of
spatial AK model, where the technology is time-varying. Taking advantage of the
good properties of the Green function, we formulate an explicit solution to the
auxiliary partial differential equation of the original problem and derive the
sufficient conditions on the consumption function that guarantee the existence
and the uniqueness of the solution and obtain the convergence properties of the
capital in the long run for the spatial AK model with trade costs.