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The spatial dimension in environmental and resource economics

Published online by Cambridge University Press:  22 October 2010

ANASTASIOS XEPAPADEAS
ANASTASIOS XEPAPADEAS*
Affiliation:
Department of International and European Economic Studies, Athens University of Economics and Business and Beijer Fellow, 76 Patission Street, 104 34 Athens, Greece. Email: [email protected]
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Abstract

Mechanisms generating patterns in spatial domains have been extensively studied in biology, but also in economics in the context of new economic geography. The Turing mechanism or Turing diffusion-induced instability has been central to the understanding of forces which endogenously generate spatial patterns, but in a context where agents do not explicitly optimize an objective. The present paper reviews tools to study, in the spirit of Turing's analysis, a mechanism generating optimal diffusion-induced instability where optimizing agents generate optimal agglomerations. By extending the maximum principle to the optimal control of partial differential equations, it is shown how under certain conditions it will be optimal to design controls so that the price-quantity system implied by the costate–state functions of the optimal control of distributed parameter systems induces optimal spatial patterns. These methods might be useful in studying pattern formation both in problems of resource management and of economic development.

Type
Research Article
Information
Environment and Development Economics , Volume 15 , Issue 6: 15 YEARS OF EDE – ADVANCES AND CHALLENGES IN ENVIRONMENT AND DEVELOPMENT ECONOMICS , December 2010 , pp. 747 - 758
Copyright
Copyright © Cambridge University Press 2010

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