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A Characterization of Ramsey Equilibrium in a Model with Limited Borrowing

  • Kirill Borissov
  • Ram Sewak Dubey

We investigate the convergence property of the capital stock sequence in Ramsey equilibria with limited borrowing by the households. In our model, at the beginning of each period, households are allowed to borrow against their end of the period wage income. Under this assumption the capital stock sequence converges to the steady state stock irrespective of the technology and turnpike property holds in every Ramsey equilibrium.

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Paper provided by European University at St. Petersburg, Department of Economics in its series EUSP Deparment of Economics Working Paper Series with number Ec-08/13.

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Length: 20 pages
Date of creation: 01 Oct 2013
Date of revision:
Handle: RePEc:eus:wpaper:ec0813
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  1. Bewley, Truman, 1982. "An integration of equilibrium theory and turnpike theory," Journal of Mathematical Economics, Elsevier, vol. 10(2-3), pages 233-267, September.
  2. Robert Becker & Stefano Bosi & Cuong Le Van & Thomas Seegmuller, 2014. "On existence and bubbles of Ramsey equilibrium with borrowing constraints," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01020635, HAL.
  3. Cuong Le Van & Manh-Hung Nguyen & Yiannis Vailakis, 2007. "Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00101237, HAL.
  4. repec:hal:journl:halshs-00101237 is not listed on IDEAS
  5. Robert A. Becker & Tapan Mitra, 2011. "Efficient Ramsey Equilbria," Caepr Working Papers 2011-009, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
  6. Stefano Bosi & Thomas Seegmuller, 2007. "On the Ramsey Equilibrium with heterogeneous consumers and endogenous labor supply," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00143421, HAL.
  7. Mitra, Tapan & Sorger, Gerhard, 2013. "On Ramseyʼs conjecture," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1953-1976.
  8. Kirill Borissov, 2011. "On equilibrium dynamics with many agents and wages paid ex ante," EUSP Deparment of Economics Working Paper Series Ec-05/11, European University at St. Petersburg, Department of Economics, revised 28 Apr 2011.
  9. 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, Oxford University Press, vol. 95(2), pages 375-382.
  10. Becker, Robert A. & Foias, Ciprian, 1987. "A characterization of Ramsey equilibrium," Journal of Economic Theory, Elsevier, vol. 41(1), pages 173-184, February.
  11. Robert Becker & Ram Dubey & Tapan Mitra, 2014. "On Ramsey equilibrium: capital ownership pattern and inefficiency," Economic Theory, Springer, vol. 55(3), pages 565-600, April.
  12. Becker, Robert A & Boyd, John H, III & Foias, Ciprian, 1991. "The Existence of Ramsey Equilibrium," Econometrica, Econometric Society, vol. 59(2), pages 441-60, March.
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