How to Kill Several Birds with One Stone: Construction of a Multi-criteria Trajectory...
0Presented by:
Alexander Vaninsky, City University of New York-Hostos Community College, Bronx NY USA
Abstract: Traditionally, the initial value problem and the boundary value problem are the focus of a course in ordinary differential equations (ODE). However, it is important to present a broader view of the ODEs including algebraic equations or finding optimal solutions. This presentation provides an example of such an approach. It demonstrates the construction of a trajectory of structural change in the national economy providing both locally and globally optimal economic growth, mitigation of greenhouse gas emissions, and decrease in energy consumption. The three variable weight coefficients reflect the relative importance of the corresponding indicators. Three projected gradients guide local optimization, each improving the economic structure in one direction. The local optimal direction of structural change forms the smallest possible acute angle with each projected gradient.
Global optimization aims to reach the final optimal state of the economic system. It determines the appropriate values for the weight coefficients and the speed of restructuring. Mathematically, the problem leads to a solution of a differential-algebraic system of equations with non-negativity constraints. Empirical data for a range of economies are available from the World Input-Output Database (www.wiod.org). Alexander Vaninsky. 2023. Roadmapping green economic restructuring: A Ricardian gradient approach. Energy Economics. 125: Sept 2023. Article 106888, provides resources for student research projects. Artificial intelligence may help find suitable clusters.