Wealth distribution and aggregate time-preference: Markov-perfect equilibria in a Ramsey economy
We 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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