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Sustainability and spatial spillovers in a multicriteria macroeconomic model

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Abstract

We analyze a macroeconomic model with intergenerational equity considerations and spatial spillovers, which gives rise to a multicriteria optimization problem. Intergenerational equity requires to add in the definition of social welfare a long run sustainability criterion to the traditional discounted utilitarian criterion. The spatial structure allows for the possibility of heterogeneiity and spatial diffusion implies that all locations within the spatial domain are interconnected via spatial spillovers. We rely on different techniques (scalarization, \(\epsilon \)-constraint method and goal programming) to analyze such a spatial multicriteria problem, relying on numerical approaches to illustrate the nature of the trade-off between the discounted utilitarian and the sustainability criteria.

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Authors and Affiliations

  1. Department of Mathematics and Statistics, University of Guelph, Guelph, Canada

    Herb Kunze

  2. SKEMA Business School, Université Côte d’Azur, Sophia Antipolis Campus, Nice, France

    Davide La Torre

  3. Department of Economics and Management, University of Pisa, Pisa, Italy

    Simone Marsiglio

Authors
  1. Herb Kunze
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  2. Davide La Torre
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  3. Simone Marsiglio
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Correspondence to Davide La Torre.

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Kunze, H., La Torre, D. & Marsiglio, S. Sustainability and spatial spillovers in a multicriteria macroeconomic model. Ann Oper Res 311, 1067–1084 (2022). https://doi.org/10.1007/s10479-020-03814-2

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  • DOI: https://doi.org/10.1007/s10479-020-03814-2

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