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A model for optimal infrastructure investment in boom towns
1980
A linear model to determine the optimal policy for investment in social infrastructure is formulated and its solution is obtained using the Maximum Principle. The unique solution is characterized by a-bang-bang control, with only one interval of investment in social capital, and the endpoints of this interval can be numerically determined, given values for the parameters of the model. A generalization of the model which allows instantaneous jumps in the level of social capital is also analyzed,
doi:10.14288/1.0079514
fatcat:tjeyhoaxlvfb7bq6bn7teec6ke