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Sustainability, optimality, and viability in the Ramsey model

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  • BONNEUIL, Noël

    (Institut national d'études démographiques, and Ecole des hautes études en sciences sociales, F-75980 Paris cedex 20, France)

  • BOUCEKKINE, Raouf

    (Université catholique de Louvain, CORE and IRES, B-1348 Louvain-la-Neuve, Belgium)

Abstract

The Ramsey model of economic growth is revisited from the point of view of viability. A viable state is a state from which there exists at least one tra jectory that remains in the set of constraints of minimal consumption and positive wealth. Viability is presented with a constraint of minimal consumption, then with an additional criterion of economic sustainability. The comparison of viability kernels with or without sustainability shows how much consumption should be reduced and when. The viable-optimal solution in the sense of inter-temporal consumption is obtained on the viability boundary of an auxiliary system. Technological progress works against population growth to favor the possibility for a given state of being viable or viable-sustainable.

Suggested Citation

  • BONNEUIL, Noël & BOUCEKKINE, Raouf, 2009. "Sustainability, optimality, and viability in the Ramsey model," LIDAM Discussion Papers CORE 2009074, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2009074
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    Cited by:

    1. Krawczyk, Jacek B & Pharo, Alastair & Simpson, Mark, 2011. "Approximations to viability kernels for sustainable macroeconomic policies," Working Paper Series 1531, Victoria University of Wellington, School of Economics and Finance.
    2. Tanguy Isaac, 2013. "Sustainability is compatible with decreasing social welfare," Economics Bulletin, AccessEcon, vol. 33(2), pages 1116-1125.
    3. Krawczyk, Jacek B & Townsend, Wilbur, 2015. "Viability of an economy with constrained inequality," Working Paper Series 4689, Victoria University of Wellington, School of Economics and Finance.
    4. Jacek Krawczyk & Alastair Pharo & Oana Serea & Stewart Sinclair, 2013. "Computation of viability kernels: a case study of by-catch fisheries," Computational Management Science, Springer, vol. 10(4), pages 365-396, December.
    5. Krawczyk, Jacek B & Pharo, Alastair S, 2014. "Manual of VIKAASA 2.0: An application for computing and graphing viability kernels for simple viability problems," Working Paper Series 3432, Victoria University of Wellington, School of Economics and Finance.
    6. Krawczyk, Jacek B & Pharo, Alastair S, 2011. "Manual of VIKAASA: An application capable of computing and graphing viability kernels for simple viability problems," Working Paper Series 1878, Victoria University of Wellington, School of Economics and Finance.
    7. Krawczyk, Jacek B. & Judd, Kenneth L., 2014. "Which economic states are sustainable under a slightly constrained tax-rate adjustment policy," MPRA Paper 59027, University Library of Munich, Germany.

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    More about this item

    Keywords

    viability theory; optimization; sustainability; Ramsey model;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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