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Efficient Ramsey Equilbria

  • Robert A. Becker


    (Indiana University)

  • Tapan Mitra


    (Cornell University)

Ramsey equilibrium models with heterogeneous agents and borrowing constraints are shown to yield efficient equilibrium sequences of aggregate capital and consumption. The proof of this result is based on verifying that equilibrium sequences of prices satisfy the Malinvaud criterion for efficiency.

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Paper provided by Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington in its series Caepr Working Papers with number 2011-009.

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Length: 36 pages
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:inu:caeprp:2011-009
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  1. Mitra, Tapan, 1979. "Identifying inefficiency in smooth aggregative models of economic growth : A unifying criterion," Journal of Mathematical Economics, Elsevier, vol. 6(1), pages 85-111, March.
  2. Gaetano Bloise & Pietro Reichlin, 2008. "Asset prices, debt constraints and inefficiency," Departmental Working Papers of Economics - University 'Roma Tre' 0089, Department of Economics - University Roma Tre.
  3. Cuong LE VAN & Yiannis VALAKIS, 2001. "Existence of a competitive equilibrium in one sector growth model with heterogeneous agents and irreversible investment," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001018, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  4. Cass, David, 1972. "On capital overaccumulation in the aggregative, neoclassical model of economic growth: A complete characterization," Journal of Economic Theory, Elsevier, vol. 4(2), pages 200-223, April.
  5. Dur n, Jorge & Le Van, Cuong, 2003. "Simple Proof Of Existence Of Equilibrium In A One-Sector Growth Model With Bounded Or Unbounded Returns From Below," Macroeconomic Dynamics, Cambridge University Press, vol. 7(03), pages 317-332, June.
  6. Chattopadhyay, Subir, 2008. "The Cass criterion, the net dividend criterion, and optimality," Journal of Economic Theory, Elsevier, vol. 139(1), pages 335-352, March.
  7. Becker, Robert A. & Foias, Ciprian, 1987. "A characterization of Ramsey equilibrium," Journal of Economic Theory, Elsevier, vol. 41(1), pages 173-184, February.
  8. Piero Gottardi & Subir Chattopadhyay, 1999. "- Stochastic Olg Models, Market Structure And Optimality," Working Papers. Serie AD 1999-15, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  9. Mitra, Tapan, 1978. "A note on efficient growth with irreversible investment and the Phelps-Koopmans theorem," Journal of Economic Theory, Elsevier, vol. 18(1), pages 216-223, June.
  10. Bloise, Gaetano & Calciano, Filippo L., 2007. "A Characterization of Inefficiency in Stochastic Overlapping Generations Economies," MPRA Paper 8780, University Library of Munich, Germany.
  11. Sorger, Gerhard, 1994. "On the Structure of Ramsey Equilibrium: Cycles, Indeterminacy, and Sunspots," Economic Theory, Springer, vol. 4(5), pages 745-64, August.
  12. Cass, David, 1972. "Distinguishing inefficient competitive growth paths: A note on capital overaccumulation and rapidly diminishing future value of consumption in a fairly general model of capitalistic production," Journal of Economic Theory, Elsevier, vol. 4(2), pages 224-240, April.
  13. Duran, Jorge & Le Van, Cuong, 2000. "A simple proof of existence of equilibrium in a one sector growth modelp with bounded or unbounded returns from below," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  14. Fernando Alvarez & Urban J. Jermann, 2000. "Efficiency, Equilibrium, and Asset Pricing with Risk of Default," Econometrica, Econometric Society, vol. 68(4), pages 775-798, July.
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