Modeling Economic Growth with Economic-Driven Migration of Labor and Capital

We analyze the effects of the economic - driven migration of labor and capital on economic growth . To this aim , we develop a new model of the Solow type that fully accounts for the spatial dependence of the flows of workers and investments on salaries and returns . Considering a rather general setting in which we do not require the knowledge of the exact expressions of the production function and the population growth rate, and applying a rigorous theoretical analysis that is valid for infinitely dimensional non-linear problems , we show that an asymptotically stable spatially homogeneous equilibrium exists . The proposed model allows us to find out and investigate interesting transitional dynamics that the standard Solow approach does not capture . In particular , we see how the migration of labor can slow down the process of wage convergence at some spatial locations and how the flow of workers , interacting with population dynamics , can reduce economic growth in countries where both developed and underdeveloped regions are present