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Welfare and Convergence Speed in the Ramsey Model Under Two Classes of Gorman Preferences

Author

Listed:
  • Wilson Cruz Vieira

    (Federal University of Viçosa)

  • Alberto Bucci

    (University of Milan)

  • Simone Marsiglio

    (University of Pisa)

Abstract

Using a one-sector, discrete-time Ramsey model, we analyze and compare the implications for welfare, capital accumulation, and speed of convergence to the steady state of two classes of utility functions that represent Gorman preferences, namely homothetic and Stone–Geary preferences. For identical economies, we show that the preference structure does not affect only the capital dynamics and social welfare but also the speed of convergence to the steady-state equilibrium.

Suggested Citation

  • Wilson Cruz Vieira & Alberto Bucci & Simone Marsiglio, 0. "Welfare and Convergence Speed in the Ramsey Model Under Two Classes of Gorman Preferences," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 0, pages 1-22.
    • Handle: RePEc:spr:italej:v::y::i::d:10.1007_s40797-020-00132-1
    DOI: 10.1007/s40797-020-00132-1
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    More about this item

    Keywords

    Ramsey model; Preferences; Convergence speed; Social welfare;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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