Boucekkine
Raouf Boucekkine
 Chercheur
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 continuoustime AKtype 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 balancedgrowth paths are not robust to uncertainty. In a second application, we evaluate the quantitative implications of adopting the stochasticstabilityrelated concept of mean growth for the comparative statics of global diversification in the seminal model due to Obstfeld (1994).
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 openeconomy AK model in which the capitaldeepening 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 growthâ€”longrun gainâ€”arise in our preferred model without investment commitment and they range, relative to autarky, from about 2% in middleincome countries to about 13% in OECDtype countries under international financial integration. Sizeable benefits emerge despite the fact that consumption initially fallsâ€”shortrun painâ€”which is, however, shown not to dwarf positive growth changes.

After years of high commodity prices, a new era of lower ones, especially for oil, seems likely to persist. This will be challenging for resourcerich 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.
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.
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We provide with an optimal growth spatiotemporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatiotemporal dynamics and agglomeration across space. We choose the simplest production function generating growth endogenously, the AK technology but in sharp contrast to the related literature which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology (through the productivity parameter A) and population. Beside the mathematical tour de force, we ultimately show that agglomeration may show up in our optimal growth with linear technology, its exact shape depending on the interaction of two main effects, a population dilution effect versus a technology space discrepancy effect.