IDEAS home Printed from https://ideas.repec.org/a/wun/timjeb/tjebv07y2014i02a01.html
   My bibliography  Save this article

Some Properties of the Solution of the Ramsey Model

Author

Listed:
  • Ioana VIAŞU

    (Faculty of Economics and Business Administration, West University of Timisoara, Romania)

Abstract

The main aim of this paper is to improve some results obtained by Smith. We provide here a closed-form solution for the Ramsey model. We prove that if the inverse of the constant elasticity of intertemporal substitution is different to the elasticity of output with respect to physical capital, then the economy described by this model reaches the unique steady-state equilibrium, for any starting values of per-capita consumption. The advantage of the paper over the existing paper is that the arguments here are not local, that is, our hypotheses are most generally possible. Consequently, we can obtain almost all other results as particular cases of our solution. Our approach clarifies why different starting values of per-capita consumption generates the same steady-state equilibrium, but of different periods of time. We also clarifiy some of previous result obtained by other authors as for example Luca Guerrini.

Suggested Citation

  • Ioana VIAŞU, 2014. "Some Properties of the Solution of the Ramsey Model," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 7(2), pages 113-122, December.
    • Handle: RePEc:wun:timjeb:tjeb:v07:y2014:i02:a01
    as

    Download full text from publisher

    File URL: http://tjeb.ro/index.php/tjeb/article/download/tjeb-vol7-2014-2-01/pdf
    Download Restriction: no
    File URL: http://tjeb.ro/index.php/tjeb/article/view/tjeb-vol7-2014-2-01
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    2. Mehlum Halvor, 2005. "A Closed Form Ramsey Saddle Path," The B.E. Journal of Macroeconomics, De Gruyter, vol. 5(1), pages 1-15, April.
    3. Smith William T, 2006. "A Closed Form Solution to the Ramsey Model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-27, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Constantin Chilarescu & Ioana Viasu, 2016. "A Closed-form Solution of a Two-sector Endogenous Growth Model with Habit Formation," Australian Economic Papers, Wiley Blackwell, vol. 55(2), pages 112-127, June.
    2. Kirill Borissov & Mikhail Pakhnin & Ronald Wendner, 2020. "Naive Agents with Quasi-hyperbolic Discounting and Perfect Foresight," EUSP Department of Economics Working Paper Series 2020/03, European University at St. Petersburg, Department of Economics.
    3. Azariadis, Costas & Stachurski, John, 2005. "Poverty Traps," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 5, Elsevier.
    4. Kazumi Asako, 1979. "Environmental Pollution in an Open Economy," The Economic Record, The Economic Society of Australia, vol. 55(4), pages 359-367, December.
    5. Gordon Cordina, 2004. "Economic Vulnerability And Economic Growth: Some Results From A Neo-Classical Growth Modelling Approach," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 29(2), pages 21-39, December.
    6. Andersson, Fredrik N.G. & Edgerton, David L. & Opper, Sonja, 2013. "A Matter of Time: Revisiting Growth Convergence in China," World Development, Elsevier, vol. 45(C), pages 239-251.
    7. Posch, Olaf, 2009. "Structural estimation of jump-diffusion processes in macroeconomics," Journal of Econometrics, Elsevier, vol. 153(2), pages 196-210, December.
    8. Alexander Beames & Mariano Kulish & Nadine Yamout, 2022. "Fiscal Policy and the Slowdown in Trend Growth in an Open Economy," Working Papers 143, Red Nacional de Investigadores en Economía (RedNIE).
    9. Axel Börsch‐Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi‐Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    10. Paulo B. Brito, 2022. "The dynamics of growth and distribution in a spatially heterogeneous world," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 311-350, September.
    11. George Halkos & Iacovos Psarianos, 2016. "Exploring the effect of including the environment in the neoclassical growth model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(3), pages 339-358, July.
    12. Mitra, Tapan, 2002. "Intertemporal Equity and Efficient Allocation of Resources," Journal of Economic Theory, Elsevier, vol. 107(2), pages 356-376, December.
    13. I. Hakan Yetkiner, 2006. "Saglik ile Buyume," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 6(2), pages 83-91.
    14. Rao Aiyagari, S., 1988. "Nonmonetary steady states in stationary overlapping generations models with long lived agents and discounting: Multiplicity, optimality, and consumption smoothing," Journal of Economic Theory, Elsevier, vol. 45(1), pages 102-127, June.
    15. Andrés Fernández & Ayşe İmrohoroğlu & Cesar E. Tamayo, 2019. "Saving Rates in Latin America: A Neoclassical Perspective," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 67(4), pages 791-823, December.
    16. ?gel de la Fuente, "undated". "Convergence Across Countries And Regions: Theory And Empirics," UFAE and IAE Working Papers 447.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    17. Li, Defu & Bental, Benjamin, 2023. "What determines the Direction of Technological Progress(2023.11.16)?," MPRA Paper 119211, University Library of Munich, Germany, revised 16 Nov 2023.
    18. Pozzolo, Alberto Franco, 2004. "Endogenous Growth in Open Economies - A Survey of Major Results," Economics & Statistics Discussion Papers esdp04020, University of Molise, Department of Economics.
    19. Matthew Higgins & Daniel Levy & Andrew T. Young, 2003. "Growth and Convergence across the US: Evidence from County-Level Data," Working Papers 2003-03, Bar-Ilan University, Department of Economics.
    20. J. Subrick & Andrew Young, 2010. "Nobelity and novelty: Finn Kydland and Edward Prescott’s contributions viewed from Vienna," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 23(1), pages 35-53, March.

    More about this item

    Keywords

    Ramsey growth model; Hamiltonian function; uniqueness and indeterminacy.;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wun:timjeb:tjeb:v07:y2014:i02:a01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Romeo Margea (email available below). General contact details of provider: https://edirc.repec.org/data/feuvtro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.