Growth and agglomeration in the heterogeneous space: a generalized AK approachJournal articleRaouf Boucekkine, Giorgio Fabbri, Salvatore Federico and Fausto Gozzi, Journal of Economic Geography, Volume 19, Issue 6, pp. 1287-1318, 2019

We provide an optimal growth spatio-temporal setting with capital accumulation and diffusion across space to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. The technology is AK, K being broad capital. The social welfare function is Benthamite. In sharp contrast to the related literature, which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology and population. Both the transitional spatio-temporal dynamics and the asymptotic spatial distributions are computed in closed form. Concerning the latter, we find, among other results, that: (i) due to inequality aversion, the consumption per capital distribution is much flatter than the distribution of capital per capita; (ii) endogenous spillovers inherent in capital spatio-temporal dynamics occur as capital distribution is much less concentrated than the (pre-specified) technological distribution; (iii) the distance to the center (or to the core) is an essential determinant of the shapes of the asymptotic distributions, that is relative location matters.

A Lipsetian theory of voluntary power handoverJournal articleRaouf Boucekkine, Paolo G. Piacquadio and Fabien Prieur, Journal of Economic Behavior & Organization, Volume 168, Issue C, pp. 269-291, 2019

We consider an autocracy where the ruling elite control both the resource wealth and education policies. Education prompts economic growth and enriches the budget of the elite. However, education also increases the “awareness of citizens” – capturing their reluctance to accept a dictatorship and their labor market aspirations – and forces the elite to expand redistribution or handover the power. A power handover leads to a more democratic regime, where the elite retains (at least partially) its economic power. This trade-off is the backbone of our Lipsetian theory of voluntary power handover. This theory provides new insights on the positive relationship between economic development, education, and democratization, and on the negative relationship between inequality and democratization. Finally, we revisit the resources-curse hypothesis within our setting.

Short-run pain, long-run gain: the conditional welfare gains from international financial integrationJournal articleRaouf Boucekkine, Giorgio Fabbri and Patrick A. Pintus, Economic Theory, Volume 65, Issue 2, pp. 329-360, 2018

This paper aims at clarifying the analytical conditions under which financial globalization originates welfare gains in a simple endogenous growth setting. We focus on an open-economy AK model in which the capital-deepening effect of financial globalization boosts growth in a in permanent but entails an entry cost in order to access international credit markets. We show that constrained borrowing triggers substantial welfare gains, even at small levels of international financial integration, provided that the autarkic growth rate is larger than the world interest rate. Such conditional welfare benefits boosted by stronger growth—long-run gain—arise in our preferred model without investment commitment and they range, relative to autarky, from about 2% in middle-income countries to about 13% in OECD-type countries under international financial integration. Sizeable benefits emerge despite the fact that consumption initially falls—short-run pain—which is, however, shown not to dwarf positive growth changes.

IntroductionBook chapterRabah Arezki, Raouf Boucekkine, Jeffrey Frankel, Mohammed Laksaci and Rick van der Ploeg, Rabah Arezki and Et al. (Eds.), 2018-04, pp. 9-19, CEPR Press, 2018


Rethinking the macroeconomics of resource-rich countriesBookRabah Arezki, Raouf Boucekkine, Jeffrey Frankel, Mohammed Laksaci and Rick van der Ploeg (Eds.), 2018-04, CEPR Press, 2018

After years of high commodity prices, a new era of lower ones, especially for oil, seems likely to persist. This will be challenging for resource-rich countries, which must cope with the decline in income that accompanies the lower prices and the potential widening of internal and external imbalances. This column presents a new VOXEU eBook in which leading economists from academia and the public and private sector examine the shifting landscape in commodity markets and look at the exchange rate, monetary, and fiscal options policymakers have, as well as the role of finance, including sovereign wealth funds, and diversification.

Mean growth and stochastic stability in endogenous growth modelsJournal articleRaouf Boucekkine, Patrick A. Pintus and Benteng Zou, Economics Letters, Volume 166, Issue C, pp. 18-24, 2018

Under uncertainty, mean growth of, say, wealth is often defined as the growth rate of average wealth, but it can alternatively be defined as the average growth rate of wealth. We argue that stochastic stability points to the latter notion of mean growth as the theoretically relevant one. Our discussion is cast within the class of continuous-time AK-type models subject to geometric Brownian motions. First, stability concepts related to stochastic linear homogeneous differential equations are introduced and applied to the canonical AK model. It is readily shown that exponential balanced-growth paths are not robust to uncertainty. In a second application, we evaluate the quantitative implications of adopting the stochastic-stability-related concept of mean growth for the comparative statics of global diversification in the seminal model due to Obstfeld (1994).

Optimal Population Growth as an Endogenous Discounting Problem: The Ramsey CaseBook chapterRaouf Boucekkine, Blanca Martínez and Ramon J. Ruiz-Tamarit, In: Lecture Notes in Economics and Mathematical Systems, 2018-06, pp. 321-347, Springer, Cham, 2018

This paper revisits the optimal population size problem in a continuous time Ramsey setting with costly child rearing and both intergenerational and intertemporal altruism. The social welfare functions considered range from the Millian to the Benthamite. When population growth is endogenized, the associated optimal control problem involves an endogenous effective discount rate depending on past and current population growth rates, which makes preferences intertemporally dependent. We tackle this problem by using an appropriate maximum principle. Then we study the stationary solutions (balanced growth paths) and show the existence of two admissible solutions except in the Millian case. We prove that only one is optimal. Comparative statics and transitional dynamics are numerically derived in the general case.

Technological Progress, Employment and the Lifetime of CapitalBook chapterRaouf Boucekkine, Natali Hritonenko and Yuri Yatsenko, In: Studies in Economic Theory, K. Nishimura, A. Venditti and N. C. Yannelis (Eds.), 2017, Volume 31, pp. 305-337, Springer-Verlag, 2017


Introduction to international financial markets and banking systems crisesJournal articleRaouf Boucekkine, Kazuo Nishimura and Alain Venditti, Journal of Mathematical Economics, Volume 68, Issue C, pp. 87-91, 2017

This note introduces to the literature streams explored in the special section on international financial markets and banking systems crises. All topics tackled are related to the Great Recession. A brief overview of the research questions and related literatures is provided.

Variable markups in the long-run: A generalization of preferences in growth modelsJournal articleRaouf Boucekkine, Hélène Latzer and Mathieu Parenti, Journal of Mathematical Economics, Volume 68, Issue C, pp. 80-86, 2017

This paper introduces variable markups in a horizontal-differentiation growth model by considering a larger class of preferences that nests the classic “CES” specification usually present in the workhorse love-for-variety models. Our first result is to obtain a generalized characterization of the Euler condition for this broader class of utility functions: in our model, the Euler rule features a supplementary term aiming at compensating the consumer for variations in the preference for variety along the consumption level. We are then also able to demonstrate that in our generalized framework, the economy’s balanced growth path displays both endogenous markups and a strictly positive growth rate of the number of available varieties (being the engine of growth). Finally, we show that under endogenous markups, the economy’s growth rate and firms’ market power can display a negative correlation, as opposed to the standard result obtained in the CES framework.