Efficient Ramsey Equilibria
Center for Applied Economics and Policy Research (CAEPR) Working Paper No. 2011-009
36 Pages Posted: 29 Sep 2011
Date Written: September 27, 2011
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.
Keywords: Ramsey Equilibria, Borrowing Constraints, Efficiency, Malinvaud Criterion
JEL Classification: C61, D90, O41
Suggested Citation: Suggested Citation