Efficient Ramsey Equilibria
Robert A. Becker
Indiana University Bloomington - Department of Economics
Cornell University - Department of Economics
September 27, 2011
Center for Applied Economics and Policy Research (CAEPR) Working Paper No. 2011-009
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.
Number of Pages in PDF File: 36
Keywords: Ramsey Equilibria, Borrowing Constraints, Efficiency, Malinvaud Criterion
JEL Classification: C61, D90, O41
Date posted: September 29, 2011
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