A Characterization of Ramsey Equilibrium in a Model with Limited Borrowing

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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Year of publication:	2013-10-01
Authors:	Borissov, Kirill ; Dubey, Ram Sewak
Institutions:	Department of Economics, European University at St. Petersburg
Subject:	Ramsey Equilibrium \| Limited Borrowing \| Convergence of capital path

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Extent:	application/pdf
Series:	EUSP Deparment of Economics Working Paper Series.
Type of publication:	Book / Working Paper
Notes:	Number Ec-08/13 20 pages
Classification:	C61 - Optimization Techniques; Programming Models; Dynamic Analysis ; D61 - Allocative Efficiency; Cost-Benefit Analysis ; D90 - Intertemporal Choice and Growth. General ; O41 - One, Two, and Multisector Growth Models
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010858823