Optimal investment in heterogeneous capital and technology under restricted natural resource (Q467487)

The paper studies a new optimal control problem relevant to economic growth theory. The authors consider the optimal control of nonlinear integral equations with endogeneous delay and state constraints. The proposed model describes a developing economy subject to resource constraints. The corresponding optimality condition is derived. The authors determine long-term asymptotically exponential trajectories that optimally combine scrapping obsolete capital and developing new clean technologies. The concluding part of the paper investigates the short-term dynamics of the model. The modeling outcomes of the paper indicate behavioral guidelines for further models of this type.