Studying a one-sector economy populated by finitely many heterogeneous households that are subject to no-borrowing constraints, we confirm a conjecture by Frank P. Ramsey according to which, in the long run, society would be divided into the set of patient households who own the entire capital...

Studying a one-sector economy populated by finitely many heterogeneous households that are subject to no-borrowing constraints, we confirm a conjecture by Frank P. Ramsey according to which, in the long run, society would be divided into the set of patient households who own the entire capital...

We examine whether the Phelps–Koopmans theorem is valid in models with nonconvex production technologies. We argue that a nonstationary path that converges to a capital stock above the smallest golden rule may indeed be efficient. This finding has the important implication that “capital...

An intriguing problem in stochastic growth theory is as follows: even when the return on investment is arbitrarily high near zero and discounting is arbitrarily mild, long run capital and consumption may be arbitrarily close to zero with probability one. In a convex one-sector model of optimal...

In a stochastic economy, long run consumption and output may not be bounded away from zero even when productivity is arbitrarily high near zero and uncertainty is arbitrarily small. In the one-sector stochastic optimal growth model with i.i.d. production shocks, we characterize the nature of...

For a class of aggregative optimal growth models, which allow for a non-convex and non-differentiable production technology, this paper examines whether the set of utilitarian maximal programs coincides with the set of weakly maximal programs. It identifies a condition, called the...

An intriguing problem in stochastic growth theory is as follows: even when the return on investment is arbitrarily high near zero and discounting is arbitrarily mild, long run capital and consumption may be arbitrarily close to zero with probability one. In a convex one-sector model of optimal...

We examine whether the Phelps-Koopmans theorem is valid in models with nonconvex production technologies. We show by example that a nonstationary path that converges to a capital stock above the smallest golden rule may indeed be efficient. This finding has the important implication that capital...

We propose an adaptation of Hartwick’s investment rule to models with population growth and show that following Hartwick’s rule is equivalent to a time-invariant real per capita net national product. In the so-called DHSS model of capital accumulation and resource depletion the proposed...

In a standard exhaustible resource model, it is known that if, along a competitive path, investment in the augmentable capial good equals the rents on the exhaustible resource (known as Hartwick's rule), then the path is equitable in the sense that the consumption level is constant over time. In...