A new formulation is given for the well-known problem of investment allocation between regions in the framework of a planning model. The case of a dual economy with a Cobb-Douglas production function is worked out in detail with an illustrative numerical example. The corresponding problem for an industrial economy with income disparity between two regions is also discussed.
Bagchi, A., Olsder, G. J., & Strijbos, R. C. W. (1981). Regional allocation of investment as a hierarchical optimization problem. Regional Science and Urban Economics, 11(2), 205-213. https://doi.org/10.1016/0166-0462(81)90004-1