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Simple Proof of Existence of Equilibrium in a One-Sector Growth Model with Bounded or Unbounded Returns from below

Author

Listed:
  • Jorge Duran

    (Universidad de Alicante)

  • Cuong Le Van

    (CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

We analyze a Ramsey economy in which gross investment is constrained to be nonnegative. We prove the existence of a competitive equilibrium for the case in which utility need not be bounded from below and the Inada-type conditions need not hold. The analysis is carried out by means of a direct and technically standard approach. This direct approach allows us to obtain detailed results concerning properties of competitive equilibria, and is easily adapted for the analysis of analogous models often found in macroeconomics.

Suggested Citation

  • Jorge Duran & Cuong Le Van, 2003. "Simple Proof of Existence of Equilibrium in a One-Sector Growth Model with Bounded or Unbounded Returns from below," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119082, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00119082
    DOI: 10.1017/S1365100502020047
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    References listed on IDEAS

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    1. Peleg, Bezalel & Yaari, Menahem E, 1970. "Markets with Countably Many Commodities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 11(3), pages 369-377, October.
    2. Amir, Rabah, 1996. "Sensitivity analysis of multisector optimal economic dynamics," Journal of Mathematical Economics, Elsevier, vol. 25(1), pages 123-141.
    3. Aliprantis, Charalambos D. & Border, Kim C. & Burkinshaw, Owen, 1997. "New Proof Of The Existence Of Equilibrium In A Single-Sector Growth Model," Macroeconomic Dynamics, Cambridge University Press, vol. 1(4), pages 669-679, December.
    4. Bewley, Truman F., 1972. "Existence of equilibria in economies with infinitely many commodities," Journal of Economic Theory, Elsevier, vol. 4(3), pages 514-540, June.
    5. BEWLEY, Truman F., 1972. "Existence of equilibria in economies with infinitely many commodities," LIDAM Reprints CORE 122, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    Citations

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    Cited by:

    1. Le Van, Cuong & Nguyen, Manh-Hung & Vailakis, Yiannis, 2007. "Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor," Journal of Mathematical Economics, Elsevier, vol. 43(3-4), pages 287-317, April.
    2. Le Van, Cuong & Nguyen, Manh-Hung & Vailakis, Yiannis, 2007. "Equilibrium dynamics in an aggregative model of capital accumulation with heterogeneous agents and elastic labor," Journal of Mathematical Economics, Elsevier, vol. 43(3-4), pages 287-317, April.
    3. Erol, Selman & Le Van, Cuong & Saglam, Cagri, 2011. "Existence, optimality and dynamics of equilibria with endogenous time preference," Journal of Mathematical Economics, Elsevier, vol. 47(2), pages 170-179, March.
    4. Cuong Le Van & Yiannis Vailakis, 2004. "Existence of competitive equilibrium in a single-sector growth model with elastic labour," Cahiers de la Maison des Sciences Economiques b04123, Université Panthéon-Sorbonne (Paris 1).
    5. Robert A. Becker, 2012. "Optimal growth with heterogeneous agents and the twisted turnpike: An example," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(1), pages 27-47, March.
    6. Becker, Robert A. & Mitra, Tapan, 2012. "Efficient Ramsey Equilibria," Macroeconomic Dynamics, Cambridge University Press, vol. 16(S1), pages 18-32, April.
    7. Marrero, Gustavo A., 2008. "Revisiting The Optimal Stationary Public Investment Policy In Endogenous Growth Economies," Macroeconomic Dynamics, Cambridge University Press, vol. 12(2), pages 172-194, April.
    8. Jean-Michel Grandmont, 2013. "Tribute to Cuong Le Van," International Journal of Economic Theory, The International Society for Economic Theory, vol. 9(1), pages 5-10, March.
    9. Sağlam Çağri & Turan Agah & Turan Hamide, 2014. "Saddle-node bifurcations in an optimal growth model with preferences for wealth habit," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 18(2), pages 145-156, April.
    10. Robert A. Becker, 2012. "Optimal growth with heterogeneous agents and the twisted turnpike: An example," International Journal of Economic Theory, The International Society for Economic Theory, vol. 8(1), pages 27-47, March.
    11. Luis A. Alcala, 2016. "On the time consistency of collective preferences," Papers 1607.02688, arXiv.org, revised Jul 2018.

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    More about this item

    Keywords

    Ramsey Model; One-Sector Growth Model; Nonegative Gross Investment; Competitive Equilibrium;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical

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