We present a spatially structured dynamic economic growth model which takes into account the level of pollution induced by production, and a possible taxation based on the amount of produced pollution. Then we analyze an optimal harvesting control problem with an objective function composed of three terms, namely the intertemporal utility of the decision maker, the space-time average of the level of pollution in the habitat, and the disutility due to the imposition of taxation. With respect to our previous works, in this paper, the system is subject to two controls, namely the level of consumption and, in addition, the taxation on physical capital rate. The optimal controls are determined by means of a sweep-type numerical algorithm that allows to solve a system of four backward-forward reaction-diffusion equations.

Optimizing Environmental Taxation on Physical Capital for a Spatially Structured Economic Growth Model Including Pollution Diffusion / S. Aniţa, V. Capasso, H. Kunze, D. La Torre. - In: VIETNAM JOURNAL OF MATHEMATICS. - ISSN 2305-221X. - 45:1-2(2017 Mar), pp. 199-206. [10.1007/s10013-016-0215-x]

Optimizing Environmental Taxation on Physical Capital for a Spatially Structured Economic Growth Model Including Pollution Diffusion

V. Capasso
Secondo
;
D. La Torre
Ultimo
2017

Abstract

We present a spatially structured dynamic economic growth model which takes into account the level of pollution induced by production, and a possible taxation based on the amount of produced pollution. Then we analyze an optimal harvesting control problem with an objective function composed of three terms, namely the intertemporal utility of the decision maker, the space-time average of the level of pollution in the habitat, and the disutility due to the imposition of taxation. With respect to our previous works, in this paper, the system is subject to two controls, namely the level of consumption and, in addition, the taxation on physical capital rate. The optimal controls are determined by means of a sweep-type numerical algorithm that allows to solve a system of four backward-forward reaction-diffusion equations.
Control problems; Convex-concave production function; Economic growth; Environmental quality; Integral nonlocal term; Large-time behavior; Reaction-diffusion systems; Taxation
Settore SECS-S/06 - Metodi mat. dell'economia e Scienze Attuariali e Finanziarie
Settore MAT/05 - Analisi Matematica
mar-2017
11-giu-2016
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2434/429335
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