Wealth distribution and aggregate time-preference: Markov-perfect equilibria in a Ramsey economy
AbstractWe study Markov-perfect Nash equilibria (MPNE) of a Ramsey-Cass-Koopmans economy in which households are aware of their influence on prices. The Ramsey conjecture fails to hold such that households other than the most patient one own positive wealth in the steady state. This confirms results that have been derived in the same model using an open-loop equilibrium concept. In contrast to the competitive and the open-loop equilibrium, the steady state of the MPNE depends on the utility functions of the households. Since the MPNE cannot be determined analytically, a high-order least squares projection method is employed.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Dynamics and Control.
Volume (Year): 33 (2009)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/jedc
Ramsey-Cass-Koopmans model Strategic saving Markov-perfect Nash equilibrium Aggregate time preference Projection method;
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