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A Closed Form Solution to the Ramsey Model

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  • Smith William T

    (University of Memphis)

Abstract

This paper derives a closed form solution for the Ramsey model with CRRA utility and Cobb-Douglas technology, for the case where capital's share is equal to the reciprocal of the intertemporal elasticity of substitution. The solution sheds light on the dynamics of the model and provides an exact expression for the speed of convergence.

Suggested Citation

  • Smith William T, 2006. "A Closed Form Solution to the Ramsey Model," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(1), pages 1-27, January.
    • Handle: RePEc:bpj:bejmac:v:contributions.6:y:2006:i:1:n:3
    DOI: 10.2202/1534-6005.1356
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    Citations

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    Cited by:

    1. Becker, Daniel Thomas, 2008. "A technical note on comparative dynamics in a fiscal competition model," Thuenen-Series of Applied Economic Theory 83, University of Rostock, Institute of Economics.
    2. Constantin Chilarescu & Ioana Viasu, 2016. "A Closed-form Solution of a Two-sector Endogenous Growth Model with Habit Formation," Australian Economic Papers, Wiley Blackwell, vol. 55(2), pages 112-127, June.
    3. Antony, Jürgen & Klarl, Torben, 2019. "Resource depletion in a Ramsey economy with subsistence consumption, exogenous technical change and capital depreciation: A full characterization," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203640, Verein für Socialpolitik / German Economic Association.
    4. Oliviero A. Carboni & Paolo Russu, 2013. "A Model of Economic Growth with Public Finance: Dynamics and Analytic Solution," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 1-13.
    5. Ioana VIAŞU, 2014. "Some Properties of the Solution of the Ramsey Model," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 7(2), pages 113-122, December.
    6. Alberto Bucci & Simone Marsiglio, 2019. "Financial development and economic growth: long‐run equilibrium and transitional dynamics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 66(3), pages 331-359, July.
    7. Simone Marsiglio & Marco Tolotti, 2018. "Endogenous growth and technological progress with innovation driven by social interactions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(2), pages 293-328, March.
    8. Posch, Olaf, 2009. "Structural estimation of jump-diffusion processes in macroeconomics," Journal of Econometrics, Elsevier, vol. 153(2), pages 196-210, December.
    9. Kirill Borissov & Mikhail Pakhnin & Ronald Wendner, 2020. "Naive Agents with Quasi-hyperbolic Discounting and Perfect Foresight," EUSP Department of Economics Working Paper Series 2020/03, European University at St. Petersburg, Department of Economics.
    10. Jürgen Antony & Torben Klarl, 2019. "Non-Renewable Resources in a Ramsey Economy with Subsistence Consumption, Human and Physical Capital Accumulation: A full Characterization," Bremen Papers on Economics & Innovation 1904, University of Bremen, Faculty of Business Studies and Economics.
    11. Carboni, Oliviero & Russu, Paolo, 2011. "The Conditions for a Balanced Growth in a Model with Public Finance: an Analytic Solution," MPRA Paper 36600, University Library of Munich, Germany.
    12. Chilarescu, Constantin, 2008. "An analytical solutions for a model of endogenous growth," Economic Modelling, Elsevier, vol. 25(6), pages 1175-1182, November.
    13. Robert Feicht & Wolfgang Stummer, 2010. "Complete Closed-form Solution to a Stochastic Growth Model and Corresponding Speed of Economic Recovery preliminary," DEGIT Conference Papers c015_041, DEGIT, Dynamics, Economic Growth, and International Trade.
    14. Marsiglio, Simone, 2014. "Reassessing Edgeworth’s conjecture when population dynamics is stochastic," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 130-140.
    15. Litina, Anastasia & Palivos, Theodore, 2010. "The Behavior Of The Saving Rate In The Neoclassical Optimal Growth Model," Macroeconomic Dynamics, Cambridge University Press, vol. 14(4), pages 482-500, September.
    16. Chilarescu, Constantin, 2009. "A closed-form solution to the transitional dynamics of the Lucas-Uzawa model," Economic Modelling, Elsevier, vol. 26(1), pages 135-138, January.
    17. Constantin Chilarescu, 2019. "On the Solutions of the Lucas-Uzawa Model," Papers 1907.12658, arXiv.org.
    18. Iulia PARA & Ioana VIASU, 2018. "On the Solutions to the Ramsey Model with Logistic Population Growth via the Partial Hamiltonian Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 142-150, December.
    19. Antony, Jürgen & Klarl, Torben, 2023. "Subsistence consumption and natural resource depletion: Can resource-rich low-income countries realize sustainable consumption paths?," Journal of Macroeconomics, Elsevier, vol. 77(C).
    20. Marsiglio, Simone & La Torre, Davide, 2012. "Population dynamics and utilitarian criteria in the Lucas–Uzawa Model," Economic Modelling, Elsevier, vol. 29(4), pages 1197-1204.

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    Keywords

    growth; Ramsey;

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