Efficient Ramsey Equilibria

Center for Applied Economics and Policy Research (CAEPR) Working Paper No. 2011-009

36 Pages Posted: 29 Sep 2011  

Robert A. Becker

Indiana University Bloomington - Department of Economics

Tapan Mitra

Cornell University - Department of Economics

Date Written: September 27, 2011

Abstract

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

Becker, Robert A. and Mitra, Tapan, Efficient Ramsey Equilibria (September 27, 2011). Center for Applied Economics and Policy Research (CAEPR) Working Paper No. 2011-009. Available at SSRN: https://ssrn.com/abstract=1934421 or http://dx.doi.org/10.2139/ssrn.1934421

Robert A. Becker (Contact Author)

Indiana University Bloomington - Department of Economics ( email )

Wylie Hall
Bloomington, IN 47405-6620
United States

Tapan Mitra

Cornell University - Department of Economics ( email )

414 Uris Hall
Ithaca, NY 14853-7601
United States
607-255-6283 (Phone)

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