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A dynamic model of optimal investment in research and development with international knowledge spillovers

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  • Sergei Aseev
  • Gernot Hutschenreiter
  • Arkady Kryazhimskiy
  • Andrey Lysenko

Abstract

We consider a two-country endogenous growth model where an economic follower absorbs part of the knowledge generated in a leading country. To solve a suitably defined infinite horizon dynamic optimization problem an appropriate version of the Pontryagin maximum principle is developed. The properties of optimal controls and the corresponding optimal trajectories are characterized by the qualitative analysis of the solutions of the Hamiltonian system arising through the implementation of the Pontryagin maximum principle.

Suggested Citation

  • Sergei Aseev & Gernot Hutschenreiter & Arkady Kryazhimskiy & Andrey Lysenko, 2005. "A dynamic model of optimal investment in research and development with international knowledge spillovers," Mathematical and Computer Modelling of Dynamical Systems, Taylor & Francis Journals, vol. 11(2), pages 125-133, June.
    • Handle: RePEc:taf:nmcmxx:v:11:y:2005:i:2:p:125-133
    DOI: 10.1080/1387395050500067361
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    References listed on IDEAS

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    1. Sergey Aseev & Gernot Hutschenreiter & Arkadii V. Kryazhimskii, 2002. "Optimal Investment in R&D with International Knowledge Spillovers," WIFO Working Papers 175, WIFO.
    2. HALKIN, Hubert, 1974. "Necessary conditions for optimal control problems with infinite horizons," LIDAM Reprints CORE 193, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. Halkin, Hubert, 1974. "Necessary Conditions for Optimal Control Problems with Infinite Horizons," Econometrica, Econometric Society, vol. 42(2), pages 267-272, March.
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