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Individual Behaviors and Collective Welfare: Ramsey's " microfoundations " of " macro-equilibrium "

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  • Marion Gaspard

    (TRIANGLE - Triangle : action, discours, pensée politique et économique - UL2 - Université Lumière - Lyon 2 - IEP Lyon - Sciences Po Lyon - Institut d'études politiques de Lyon - Université de Lyon - ENS LSH - Ecole Normale Supérieure Lettres et Sciences Humaines - CNRS - Centre National de la Recherche Scientifique)

Abstract

More than the single determination of a mathematical optimal saving's rule, the issue at stake in Ramsey'1928 EJ paper was to understand the consequences of individual savings behaviors on collective welfare. The challenge was therefore, and more profoundly, to state a theoretical representation allowing connecting a micro- and a macro level. In contrast with some retrospective interpretations, Ramsey exactly avoided any representative agent logic, in the double sense we give today to this concept in macroeconomics: a way to pass over the individual idiosyncrasy in constructing a fictional economic agent whose choices represent those of an underlying decentralized economy or a way to use an agent that reflects the aggregation of individual behaviors. Ramsey's challenge was rather to state results concerning macroeconomic equilibrium by bypassing the partial equilibrium framework he inherited from Cambridge. The challenge leads him to scrutiny anf formalize different kinds of economic agents: nation, individual, family.

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  • Marion Gaspard, 2005. "Individual Behaviors and Collective Welfare: Ramsey's " microfoundations " of " macro-equilibrium "," Post-Print halshs-01162036, HAL.
    • Handle: RePEc:hal:journl:halshs-01162036
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01162036
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    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
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    3. Olivier Blanchard, 2000. "What Do We Know about Macroeconomics that Fisher and Wicksell Did Not?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1375-1409.
    4. Fisher, Irving, 1907. "The Rate of Interest," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number fisher1907.
    5. Collard, David, 1996. "Pigou and Future Generations: A Cambridge Tradition," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 20(5), pages 585-597, September.
    6. Mauro Boianovsky, 1998. "Wicksell, Ramsey and the theory of interest," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 5(1), pages 140-168.
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    1. Marion Gaspard & Antoine Missemer, 2019. "An inquiry into the Ramsey-Hotelling connection," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 26(2), pages 352-379, March.
    2. Karen Knight & Michael McLure, 2012. "The Elusive Arthur Pigou," Economics Discussion / Working Papers 12-05, The University of Western Australia, Department of Economics.

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