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Economic Theory
Article
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Economic Theory
Article . 2013 . Peer-reviewed
License: Springer TDM
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zbMATH Open
Article . 2014
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Article . 2012 . Peer-reviewed
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On Ramsey Equilibrium: Capital Ownership Pattern and Inefficiency

On Ramsey equilibrium: capital ownership pattern and inefficiency
Authors: Robert Becker; Ram Sewak Dubey; Tapan Mitra;

On Ramsey Equilibrium: Capital Ownership Pattern and Inefficiency

Abstract

The first sections of this paper represent an interesting contribution to the weak turnpike property in connection with the standard dynamic (periodic) model of Ramsey equilibrium and possible inefficiency of such equilibria and give a good overview about problems and results in this field (especially along Ramsey equilibrium paths). Under `weak turnpike property' the authors understand that eventually the most patient household is never in a no-capital position. Starting with Section 5 of this paper, the authors deal with -- as they say -- the basic unresolved question, whether Ramsey equilibria always satisfy the weak turnpike property. As an answer they construct under special conditions an example of a Ramsey equilibrium (period-three Ramsey equilibrium cycle) in which the most patient household reaches a no-capital position infinitely often (in fact periodically) and the Ramsey equilibrium is inefficient. By the way, the authors mention a recent paper by Mitra and Sorge, where for a continuous-time version of the considered model the most patient household owns the entire capital stock of the economy after some finite time in every Ramsey equilibrium.

Related Organizations
Keywords

Cass criteria, Special types of economic equilibria, Ramsey-Euler equation, shadow price, period-three Ramsey equilibrium cycle, maximal income monotonicity, efficiency, Ramsey equilibrium, weak turnpike property, Special types of economic markets (including Cournot, Bertrand)

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
18
Top 10%
Top 10%
Top 10%
bronze