The standard title of this paper could be replaced by “the spirit of capitalism as a key to solving for an explicit Ramsey saddle path”. Indeed, starting from a Utility function describing preferences for consumption and savings, the model introduces the concept of the capitalist’s spirit from Max Weber (1905) – with a direct preference for wealth or capital – and becomes similar to the one of Heng-Fu Zou (1994) except that his specification includes the capital stock instead of the flow of saving. Not only does the presented model preserve the long-run implications on growth of countries, such a maximising criterion in the dynamic program allows an interesting application of the Pontryagin’s Maximum Principle, and provides standard results of excellent quality: the model presents an extremely simple expression for the saddle path and becomes both qualitative and quantitative with strong analogies to the exogenous one of R.Solow (1956). The two models are put in relationship through a discussion of the golden rule (E.Phelps 1961), after some analysis of variations.
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