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On Ramsey's conjecture with AK technology

Author

Listed:
  • Tamotsu Nakamura

    (Kobe University)

Abstract

This paper analyzes growth and wealth distribution in a simple AK model in which households are heterogeneous not only in time-preference but in intertemporal substitution. Contrary to the result without long-run growth, the most patient household does not always own the entire capital in an economy with perpetual growth. In addition, it is shown that, if the most impatient household has high intertemporal substitutability, it can own the almost all (but not entire) capital of the economy in the long-run.

Suggested Citation

  • Tamotsu Nakamura, 2014. "On Ramsey's conjecture with AK technology," Economics Bulletin, AccessEcon, vol. 34(2), pages 875-884.
    • Handle: RePEc:ebl:ecbull:eb-14-00219
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2014/Volume34/EB-14-V34-I2-P82.pdf
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    References listed on IDEAS

    as
    1. Kirill Borissov & Stéphane Lambrecht, 2009. "Growth and distribution in an AK-model with endogenous impatience," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(1), pages 93-112, April.
    2. Alvarez-Pelaez, Maria J. & Diaz, Antonia, 2005. "Minimum consumption and transitional dynamics in wealth distribution," Journal of Monetary Economics, Elsevier, vol. 52(3), pages 633-667, April.
    3. Francesc Obiols-Homs & Carlos Urrutia, 2005. "Transitional dynamics and the distribution of assets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(2), pages 381-400, February.
    4. Robert A. Becker, 1980. "On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(2), pages 375-382.
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    Cited by:

    1. Shinya Tsukahara, 2017. "Habit formation, growth, and Ramsey's conjecture," Economics Bulletin, AccessEcon, vol. 37(4), pages 2871-2880.
    2. Borissov, Kirill & Pakhnin, Mikhail & Puppe, Clemens, 2017. "On discounting and voting in a simple growth model," European Economic Review, Elsevier, vol. 94(C), pages 185-204.
    3. Nakamura, Tamotsu, 2020. "On the long-run wealth distribution in a simple Ramsey model with heterogeneous households," Economic Modelling, Elsevier, vol. 84(C), pages 177-180.

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    More about this item

    Keywords

    Ramsey conjecture; AK technology; Time preference; Intertemporal substitution;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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